Posted: Sun Apr 08, 2007 10:02 am Post subject: newbie
hi,
i am in the process of getting a home and am shopping around for mortgages. i have a few questions:
1. do getting a pre-approval affect your credit. if yes, how do i make sure my credit is not affected twice, once to get preapproval and one for the actual approval, provided they are 14 days apart
2. should i go get a mortgage from a direct lender or broker? what r the pros and cons. i already know i want a 30 yr fixed.
Posted: Sun Apr 08, 2007 9:23 pm Post subject: RE: How inquiries may affect credit score
Hi Xmljar,
Getting a pre-approval or an approval does not affect your credit score. What actually affects the score is inquiry about your credit score and payment history. All inquiries made during a 14 day period is collectively taken as a single inquiry.
However, under the FICO scoring system, the 14 day period has been extended to 45 days. But it is up to the lender to decide whether he will go for the 14 day or the 45 day period.
When you shop for a home loan and approach different companies, they may request you for a copy of the credit report. This creates an inquiry on your credit history and the inquiry stays on your credit report for nearly 2 years. However, credit scoring systems consider the inquiries for the past 1 year.
Your score isn't affected when you approach different companies and enquire about their loan related services. It is only affected to some extent when different companies ask you for a copy of the credit report.
2. should i go get a mortgage from a direct lender or broker? what r the pros and cons. i already know i want a 30 yr fixed.
Contacting a mortgage broker gives you the advantage that they deal with multiple lenders and can shop for you for best available terms while on the negative end, being tricked into paying more than what the actual market rates are is more likely when you deal with a bad broker. And possibility of encountering such a broker is higher than what it is for a lender.
Posted: Mon Apr 09, 2007 7:53 pm Post subject: Shopping for a mortgage
Good idea to shop for a mortgage.
A broker will 'shop' for you to find the best rate and program. When dealing with a direct lender such as a bank or credit union, you will only receive information on limited programs they offer.
A broker can shop many lenders with one credit report(hopefully)--ask the broker how many times they'll pull your credit and tell them you only want it pulled once.
Of course if it's only a 30 year fixed that you want then it's pretty cut and dry-shop only 3 places: 1 Bank, 1 Credit Union and then a Broker. Credit will be pulled a maximum of 3 times and this should not affect your credit to the point of it dropping beyond normal.
It amazes me how many people will 'Car shop' and have credit pulled 10 times and not even think of their score dropping in the process--but somehow think twice when shopping for a mortgage.
Posted: Sun Mar 16, 2008 8:51 pm Post subject: Bad broker
Please see my previous post about my mortgage broker experience. How can I stop him from pulling my credit whenever he feels like it and what is my recourse for the existing violations?
xmljar
