Hello: Can I please get some assistance. We are in the process of putting our house for sale and buying another. I am on the Pre-qualifying Process so more than likely my actual credit has not been used, ( if I am mistaken please correct me ). The next step will be to get Pre-approved ( I assume that is next since I've been given a list of documents to provide the mortgage broker to verify income). My main goal aside from getting a good house is buying points to lower my interest in order to maintain a comfortable payment, but I also want to shop around with different lenders for the best deal. I plan on checking with two other different lenders besides the one that I'm going through right now. Any advice will be greatly appreciated.

Thank you in advance

MEB4

CaptainRich

Your credit score still probably be affected, but not by much. The way I understand it, whenever a lender looks at your credit score, it takes a "hit." Everyone of these "hits" has a small impact, though minor, can add up. Most lenders will take this into consideration, so I'm told. They know how it works. Good luck.

ScottGem

If you have lots of records applying for credit, it may have a small affect on your score.

Emland

Yes, it can affect your credit score. We did one of those online "we'll have 5 offers in minutes" things and found out later than we got 7 dings on our credit history. It doesn't look good if you are going to look to do other financing within 2 years of the search since that is how long it takes before they drop off.

We learned the hard way. I think it is completely unfair, how else are you going to shop around for a rate? If you do shop around you end up paying a higher rate because of all the inquiries.

AW805

Yes it will affect your credit score. More than likely the lender will require you to provide at letter to explaining why all the credit inquiries. Basically what they are interested in is if a lender is inquiring while you are in the process of purchasing a home that you are not taking on anymore loans or credit lines that will affect your credit score.

Also, once you've decided on a lender to use be sure to obtain a Truth In Lending Statement that discloses all fees and charges. Last thing you want is to get down to closing and the Lender has hit you with a hidden fee.

MEB4

Thank you all for each of those responses. I sincerely appreciate it.

Sincerely,

MEB4

CaptainRich

True. And use the letter be an opportunity to explain any other blemishes on your credit report... one time one of my father's credit cards showed up on my report! And we live literally diagonally across country from each other. I'm in Fl, he's in Washinton.

And don't be afraid to mention your also shopping for a lender and a rate.

MEB4

Thank you CaptainRich... I really do appreciate all the information. Thank you again

-MEB4

Dr D

A few years ago I sat through a 3 hour phone seminar hosted by Fair Isaac Company (FICO). They said that several inquiries from different mortgage lenders in a short time would count as one inquiry for scoring purposes. They were somewhat vague on the time period, but I would think that a couple of weeks would be reasonable. They said the same holds true for someone shopping for a car loan. You made mention of your intent to pay extra discount points to buy the interest rate down. I generally advise against this. The yield spread for 1/2% difference in the rate of a 30 year loan is about 2 points. On a $100K 30 year loan, a 6.00% loan would cost you $2000 more than a 6.5% loan. The payment on the lower rate would be $32.52 less. At the lower payment it will take you 61.5 months to recover your $2000. If you keep the loan for the next 10 or 20 years, obviously you will come out ahead with the lower rate, but you will either sell or refinance the home long before that time. A small buydown or buy up in the rate can make sense, because the price between each 1/8th % increment is not the same. If you can get 1/8% lower rate at a cost of only 1/4 point, it is a good value. If you can buy the rate up 1/8% with the lender paying you 1/2 point to do this, then it's a good value. The days of major permanent rate buydowns is long past. During the reign of Mr. Peanut (Carter), when rates hit 17.5%, I saw a builder pay 29 discount points to buy the rate down for a buyer. Such things are no longer allowed, as excess seller contribution. Your bet bet is probably a loan with zero points and zero origination fee.

Home Retention Agency

And yet the original poster will pull their own credit and find in the list of derogs that there have been too many recent inquiries.

With Fair, Isaac, it's all smoke and mirrors.

If it wasn't confusing, they wouldn't have a product to sell.

If the process were straightforward, it would be too easy to rate creditworthiness and there would be no need for a score.