Credit Score in Houston>Question Details

Susanmcf02, Home Buyer in Houston, TX

how does preapproval for a mortgage affect credit score?

Asked by Susanmcf02, Houston, TX Sat May 28, 2011

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13
Marvin Von Renchler’s answer
Let me caution you all that no matter what FICO and the bureaus say about how they look at mortgage inquiries---they are masters of mis-information and there is no proof of what they say. You can shop for a loan andhave youir score go up. I was a mortgage broker for almost 30 years. Ive seen it happen. Preoblem is the score can change daily even if there has been no activity on any account! The bureaus can tell you that the increase had nothing to do with the multiple mortgage inquiries and these is nothing you can do to prove otherwise.

The entire concept of having a score lowered for just inquiring about items to purchase or trying to find different credit cards, etc. is horribly flawed!!! What if I looked at ten cars before deciding to buy? Yeah, its not wise to give your social security number but many times they have to take it and pull you just to see what type of financing they can offer. If you dont like the terms and go elsewhere, why should you be penalized? They know by the end results that you didnt buy ten cars. Its just another way to KEEP SCORES DOWN for the benefit of the lenders, who raise rates as scores lower. This used to be a huge part of the sub-prime world when it happened en masse and millions of people were ripped of with high rates they didnt deserve. Its harder no for that to happen and usually results in a flat rejection for a mortgage instead of an increased rate.

Have one lender pull your full report with all scores. Ask for a copy. If you shop anywhere else, tell them they must use that or use nothing. Some wil tell you that to be truely, fully approved they must run you through the underwriting computer systems and that uses a new pull to grade you. Unfortunately this is true, and another way the score company, Issac Fair (FICO) makes money off every living person in the country.
0 votes Thank Flag Link Mon Nov 12, 2012
I agree with both of the earlier replies! They MUST, MUST, MUST return phone calls! Nothing will stress you out more when purchasing a house than a loan officer that is NEVER AVAILABLE to take calls! Good call ladies!!! : )

Diane Hermis
3 votes Thank Flag Link Sat May 28, 2011
No set number, but in my experience you will lose 3 - 5 points for the initial inquiry.

http://www.myfico.com/CreditEducation/CreditInquiries.aspx

The above link is to the 100% accurate information about multiple inquiries from the company who developed the FICO Score that all of us lenders use.

Let me know if I can answer any follow up questions.


Tom Burris
Mortgage Banker
DallasLoanGuy.com
(214) 763-4629 cell/text/nights/weekends
tomburris@dallasloanguy.com
Lending all across the Great State of Texas!!
2 votes Thank Flag Link Sat May 28, 2011
According to my lender you can shop around as much as you like within a 30 day period without it affecting your credit score. To be sure ask your own lender they should know.
0 votes Thank Flag Link Thu Jun 2, 2011
Good Morning, Susan!
Hope your Memorial Day Holiday is special, safe, and fun. Getting pre-approved won't be a ding on you credit as long as you don't shop around to a lot of mortgage companies (say more than 5) in a 3-4 week period. If you would contact me I am a realtor and can help you with your home search and guidance through the processes to purchase a home. Getting the financing is just one of the steps. You need to be able to trust the people you are working with. You can email me... Kathleen Realtor1 @ gmail. com or call me as well. My number is available when you select the info by my photo.
Enjoy the holiday and remember those that served, Kathleen
0 votes Thank Flag Link Sun May 29, 2011
These are some great answers to your question, but I have a suggestion that is very important. Do get 3 quotes during the same time period and use that time as a hiring process for your lender. Do they get you answers quickly, are they available locally, are they efficient and positive in their manner? Nothing worse than having to deal with a lender that wont answer phone calls or e-mails. Especially when you are getting close to closing. Make sure to get your approval letter sent to you via e-mail so you have a copy on file. Get your Good Faith Estimate GFE, and see how long the rate they have set for you is good for and get it in writing.

I don't know what area of town you are looking to purchase, but I focus on the Northside (Houston Spring TheWoodlands), Cypress, Katy and Inner Loop.

Feel free to contact me or check out my HAR website.
0 votes Thank Flag Link Sat May 28, 2011
Hi Susan ,

The credit scoring system allows you to shop with 2 or 3 loan companies within a 30 day period , and it treats it like one inquiry , with a mortgage , car or student loan . Usually one hit for 3 to 5 points ( not much )

The same is not true when applying for several credit cards . Each Application will trigger a credit pull , and that could possibly reduce your score as 3 inquiries .

I will be happy to answer any more questions you may have , about Real Estate in Houston .

I can be reached @ 281-568-4537 . Days , evenings and weekends included .
or Email me houtex123@gmail.com

Have a great day !

Les Lobo ... Your Realtor professional

In business for over 20 years !
Will go the extra mile to get the job done

Trend Setter Realty

281-568-4537 Direct
houtex123@gmail.com

.
Web Reference: http://www.har.com/LesLobo
0 votes Thank Flag Link Sat May 28, 2011
Hi Susan,

In addition to what has been very well noted in the previous responses, make sure you get from competing lenders GOOD FAITH ESTIMATE and Loan Fees Worksheet, so that you can choose what best suits you. Additionally you want to ask lenders about their processing and underwriting process. Let me know if you have any questions.

Best wishes,

Mario Romero
Mortgage Banker &
Real Estate Broker

marior@r3yes.com
832.818.5868
0 votes Thank Flag Link Sat May 28, 2011
Susan,

The effect is minimal. Credit Scores are very complex in how they are calculated. They take into account you are shopping for a mortgage and not a credit card. When you shop for a mortgage they do group all credit pulls from mortgage companies and count them as 1 in a given 30 day period.

Even with that being the case I would only have one company or individual pull your credit. Then make sure they tell you your credit scores. From there on if you want to shop around you can just give them your 3 scores and no credit pull is necessary unless you decide to proceed with that lender.

Good luck to you.

Don Groff
REALTOR | Mortgage Broker | Consultant
Keller Williams Realty | 360 Lending Group
o.512.669.5599 m.512.633.4157
listings@dongroff.com
0 votes Thank Flag Link Sat May 28, 2011
As an addition to an earlier reply, it's my understanding that it does not impact the score at all as long as it is within a specific time limit (I've heard from 30 and 45 days so I'd stick with 30 unless your loan officer tells you differently) and the pulls are for the same type purchase, ie mortgage as it's supposed to indicate that you are shopping and not buying from three different lenders. But I'd check this out with a loan person.

if you are thinking of buying a home, I'd highly recommend that you approach more than one lender, as they vary in products offered; also you want someone with whom you are comfortable and you trust. Also, be sure they are the kind who return calls and emails within a reasonable amount of time.
0 votes Thank Flag Link Sat May 28, 2011
It is always important for you to get preapproved before calling an agent to look at a home. This saves you and the agent time. The preapproval will let you know how much you can afford and if you can get financed. Getting preapproved will lower each credit report 3 points. If you are serious about purchasing, you have to do this. The seller will not even look at an offer without this letter. If you are not willing to do this prior to meeting with an agent, that tells the agent that you are not serious about purchasing a home and they may not take you out to look at homes. Especially with the gas prices the way they are.

I hope this helps. If you are looking for a GREAT agent, I am here to help! I also know of a good lender that can see if you qualify for tax credits. Good luck!

Diane Hermis
Total Real Estate Services
832-620-6304
dianehermis@yahoo.com
0 votes Thank Flag Link Sat May 28, 2011
Hi there,

A pre-approval does hit your score minimally up front but you are allowed to shop lenders during a 30 day period up to 3 different companies with it only impacting the score once, from what I understand and have seen. They understand people have to give full socials in order to really get a quote and the same for buying any one type of loan - like a car etc.

It is wise to shop around and get very comfortable with the lender who will be your liason throughout the process. You need to have very good rapport and someone willing to explain everything to you and return you emails or phone calls in a timely fashion.

Good luck to you!
0 votes Thank Flag Link Sat May 28, 2011
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