Preapproval cause credit probs?
I am getting confused by all these books and post..everyone seems to say its in our interest to get preapproved, so you know what you can afford…but then i read too many requests and it could screw your credit..how to you really compare the package mortages have if they only give you the GFE after…
I am getting confused by all these books and post..everyone seems to say its in our interest to get preapproved, so you know what you can afford…but then i read too many requests and it could screw your credit..how to you really compare the package mortages have if they only give you the GFE after applying….is this where brokers have a leg up…
Bank rate will show “best case” rates. You’ll see tremendously low rates for such things as 30-year jumbos, but remember they don’t apply to you. You live in New York and everything is more expensive. You’ll still see good rates, and certain out of state lenders will offer you better deals than the NY locals. The loans will take a little longer to close, maybe 45 days, and the brokers wont be as savvy about the situation here. Make sure they hire an appraiser who knows the beat and isn’t some jerk from out of town. You can get burned if the financing doesn’t come through, you know?
Dealing with mortgage brokers is a pain because they rely heavily on the “reciprocity” tactic, making you think they’ve really hustled and served you when really they’re nothing special. I’ve had a team of four guys hustling for my business blowing smoke, making a fuss. It’s all show. Get pre-approval from one reputable broker so you know you limit, then get GFEs from other brokers and lenders. Don’t let them pull your credit. They only want to do this to trick you into thinking they’ve done you big favors. If you must, show them your pre-approval from their competitor. It will have your 3 credit scores and other details. Don’t for one minute base your decision on “relationship” factors. These guys aren’t your friends. Most likely they’re selling you down the river and there is always a better rate. They’re playing you. Now, are you man enough to play back?
If you have good credit (650+) with a good annual income you do not need to get pre approved. Most prime banks will lend 3x your annual income unless your purchasing a multi-family which changes the dynamics. I agree with the above poster that you may want to shop for bank rates first. This will better define what your monthly mortgage will be/what you can afford. Now with this said some Real Estate brokers want to see that your serious about buying and that you qualify to even buy a house.
If you have a bunch of credit inquiries at one time it doesn’t affect your score as badly. So the key is to make sure to call up banks all within a two-three week period. But yeah there is no way for the bank to give you a quote without pulling your credit.
i didn’t write my question well..how do you shop around without going through the preapproval process and not using a broker to find out info besides rates(closing costs, points)..just call around ALOT…because these mortage websites don’t seem to post the whole deal… Thanks
If you do one or two credit checks, which is what they do when you get preapproved, it will have very little effect on your credit scores. If you have several done, just make sure it’s within a two-week period and it will be treated as one inquiry. Suze Orman devotes a lot of time to this, I would search for some of her articles (or go to book store and read this section in one of her books. It will clarify and reassure you.
It’s not the preapproval that hurts you, it’s the inquiries that hurts you. Credit Reporting agencies look at multiple inquiries as your INABILITY to get sufficient credit extended and therefore it lowers your score.
So if you bounce around trying to get preapproved by different backs all those inquiries are going to hurt.
i thought i heard they fixed that credit rating thing so thigns like preapprovals wouldn’t negatively affect it. the thing about preapprovals is, they’re good in that they bring everybody on board, knowing how much you can afford and having the bank back you up. but if you notice, the only example anybody can ever think of in which a preapproval really matters is if two otherwise evenly-matched buyers are vying for a property and one is preapproved, the other is not. wow! the preapproved guy gets the house! when my friends bought a place, their mortgage broker told them to just tell sellers they were preapproved, but i don’t think anybody ever asked.
Pre Approval doesn’t really do anything for you. Its a ploy to get people excited about their ability to get a loan. If you have a good credit score, and you know that you can command the best rate available, you shop the rates first. Go to bankrate.com and see who offers the best rates and what their criteria is.
Too many inquiries on your credit report will have a negative impact on your score.