Financing in Walnut Creek>Question Details

James, Other/Just Looking in WC

Canceling refinance application. Is my credit going to take a hit?

Asked by James, WC Wed Dec 17, 2008

I applied to refinance my house and locked in the rate. I received all of the paperwork but I haven't really signed anything. If I were to cancel now because the rate has dropped again (my lender will only renegotiate if I buy down points) Would my credit take a hit ? I understand that multiple pre-qualification inquires will not hurt your credit, but I am not sure if canceling after I've submitted the application and done the appraisal would hurt my credit score.

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Hello again James, the trigger that "dings" your score is the action of pulling a new credit report outside of the 30 day period, nothing more. Having said this, there is such a thing as a "supplemental report" that takes off errors, but this does not update the score. In some cases, you may want to actually re-pull the credit report if errors have been removed, or positive pro-active action has been exercised to improve your score.

For more information on credit scoring please see the link below.

Best Regards, -Steve
0 votes Thank Flag Link Tue Dec 23, 2008
thank you all for your answers. so as long as i do it within the 30 day period, my credit won't take a hit if i switch lender? Does the same apply if I am already in escrow? I just got the paperwork saying that an escrow officer has been assigned....

Thanks
0 votes Thank Flag Link Thu Dec 18, 2008
Hi James,

The real key here is whether your tri-merge credit report was pulled. Each time your credit is run outside the initial 30-day window you will take about a 5-point hit. Not much, but 5 points can make all the difference in the rate you may qualify for.

Best Regards,

Steven A. Ornellas, GRI, ABR, e-PRO, CMPS, RE Masters, MBA
REALTOR® / Mortgage Banker-Broker / Certified Mortgage Planning Specialist
Steven Anthony Real Estate & Financial Services
Expect Excellence. Get What You Expect.â„¢
Cell: 510.461.6011
http://www.Steven-Anthony.com SteveO@Steven-Anthony.com
0 votes Thank Flag Link Thu Dec 18, 2008
The 3 day right to cancel is only if you closed the loan. The application can be cancelled at any time without penalty. Unless you paid an application fee, you have nothing to lose. I would send a letter to the mortgage company telling them you would like to withdraw your application so you have proof you cancelled. GOOD LUCK!
Web Reference: http://www.myallied.net
0 votes Thank Flag Link Thu Dec 18, 2008
James, if you are refinancing, you have 3 days even after you signed the documents to withdraw from the contract, no questions asked. The lender must provide you this disclosure along with all the documents you sign.
Your credit is not affected because you do not sign. Your credit is affect when it is run too many times. So if you are considering having to work with a different lender, just make sure to obtain a copy of your credit report (you are entitled to this copy) so the next lender does not have to run a report. In time the new lender will have to run it again once you get close to closing time.
You are still responsible for the costs incurred by the lender you have been working with, i.e. appraisal report.
If you refinance promptly the new lender my be able to utilize this report, you may just have to have the appraiser to redirect the report to a new lender, depending on how it was written, this may require an additional fee from the appraiser.
If you have any questions, you may call me or e-mail
Good luck!
Maria
SMART Real Estate Services
We offer flat rates, reduced commission, buyers rebates!
707 246 1388
Maria
0 votes Thank Flag Link Wed Dec 17, 2008
As I understand it, mortgage inquiries are considered a "soft pull" and should not affect your credit score. Give my personal lender a call...Linda Grassi...925-824-4848. She should be able to answer your questions and help you.
Web Reference: http://www.cindihagley.com
0 votes Thank Flag Link Wed Dec 17, 2008
Cindi Hagley, Real Estate Pro in San Ramon, CA
MVP'08
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