Pre-Qualification vs. Pre-Authorization

Asked by Ronnie, Philadelphia, PA Mon Jun 2, 2008

If I decide to let several banks do either my pre-qualification or my pre-authorization, is it true that this can decrease my credit score? Can anyone recommend who would be good to use for both processes? My realtor recommends BofA, but I'm not sure.

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Andres Munar, Mortgage Broker Or Lender, State College, PA
Tue Jun 3, 2008

If you decide to let several lenders give you quotes this will not effect your credit score if you do it all with in a certain time period. I like to say no more than 2 weeks. If you start to go over that it will definately effect your score. And in this market every single point counts and can vary your interest rate. If you need pre-qualified I can assist you just give me a call at 1-800-839-6186x334. We currently have 6 offices in PA and I am available for travel. Thank you and good luck
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Jeremy S. Hi…, , Cherry Hill, NJ
Mon Jun 2, 2008

I notice you have been around here for awhile asking questions. That's Good! You credit score does decrease when you have numerous inquires to your credit. This is something you should be concerned about. I've had clients who used had some unprofessional brokers run their credit 10 and sometime 20 times while shopping for an investor. That is not to scare you but its the truth. It is understood that when you are shopping for a loan you will have a few lenders look at your report tho. What you should do is pull a copy for yourself that would be a 3-1 report. This does not count as an inquiry. As a sidepoint its worth the 10 bucks a month to join a credit monitoring service. Once you know your credit score then a lender can let you know what you qualify for. There's no guarantees until you actually submit an application and lock in a rate. I can let you know what you qualify for based on your income, assets, credit score and monthly debt. This will give you an idea of your purchasing power. If you would like to get approved or if you want the best rate I can assist you as well. I'm a licensed loan officer. I'm employed by a direct lender. Information is free. Call me anytime to interview. 1-888-818-0957
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Fred Glick, Agent, Mountain View, CA
Mon Jun 2, 2008
As a 25 year veteran of the mortgage business and a REALTOR(R), my advise is let one company do a real preapproval. This means putting your information into the Fannie Mae or Freddie Mac computer and getting an approval there. Don't have more than one company do it because it is redundant and the more you run your credit, the worse it will get AND it might be a higher price loan that you get stuck with :(. When you have a house under agreement and a firm closing date, then go shop for rates/points/fees and choose one company. Good luck!
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Terrence Cha…, Home Owner, Allentown, PA
Mon Jun 2, 2008
Pre - qualification has nothing to do with digging into your credit report. The lender agent just asks you a series of questions to which the letter is based. Which is one main reason REALTORs do not trust these letters with the paper it was written on.

Pre-approval, on the other hand, is a much stronger document. The lender gets information on all the bills you have on a monthly basis, see what your mortgage or rent payments have been like in the past six months or so and pulls a credit report. Then they finally figure what amount you are pre-approved for which could be much higher than what you can actually afford. This is where people can get house poor.

Checking out several lenders within a thirty day time frame will general not affect your credit score too harshly.

Hope that helps.

Terrence Charest
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Michael D De…, , 18969
Mon Jun 2, 2008
Hello Ronnie,
If you do your mortgage shopping within a couple of weeks, it shouldn't affect your score. When it does lower your score, it's only by a few numbers. I woould be happy to prequalify you and find you a great mortgage. Good Luck!

Michael D Delp
Mortgage Pro
4802 Old Bethlehem Pike,
Telford Pa. 18969
Ph- 215-453-1025
Fax- 215-453-1012
Cell- 610-762-0318
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