Q&A: How to shop for mortgages without dings on my credit?
Question by USC MissingLink: How to shop for mortgages without dings on my credit?
I want to shop for mortgages for a new house without them needing to run my credit every time since having my credit run negatively impacts my credit (why is that anyway?).
How should I go about shopping for mortgages to get the best rates, lowest fees and best overeall package?
Best answer:
Answer by Retired bookworm
When you’re shopping for a lot of credit, it’s assumed that you need money for more than a single purchase. It doesn’t really hurt your credit to shop for a single type of credit for a single purchase.
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Sorry too tell u this but there is no way around that unless u know some-one that can do a pre-approval on what u earn monthly. I know Bank of America used to offer something like that but don’t know if they still do.
Have your credit pulled by one company. Ask for a copy of your report. Then you may shop around by asking each potential creditor to make an offer based off of the credit report copy that you provide to them. Specifically ask them to NOT pull your credit again (they need your permission to do so). This should solve your problem. Any reputable mortgage lender can prequalify you based off of a third party credit report, although some will require that if you decide to go through with a loan through them, they must be able to pull their own credit report for their file. I believe that the major credit bureaus (Equifax, Transunion, and Experian) only deduct points from your credit score after 3 credit pulls within a 60 or 90 day period of time.
Okay, first when shopping for a specific type fo credit you have (I believe) up to 14 inquiries that count towards your purchase, that mathmatically should only count as one, according to the bureaus. The credit bureaus use a software developed by the Fair Isaac corp. that mathmateically uses information about you to calculate your risk as a borrow. This software various slightly according to the specifications of each bureau who has purchased it. Anyhow, second, you can get a copy of your credit report from http://www.annualcreditreport.com for free, once annually, from all 3 bureaus. For a fee they will also give you your credit score. Typically lenders look at your “mid” score which is your middle credit score of the 3 scores. So if you hae 650, 675 and 700, they would base your rate partly off the 675 score. Third most important factor is going to be your debt to income ratio. You can figure that out yourself. Any mortgage broker or lender will want to pull your credit but it’s not absolutely neccessary in order to determine if you and that lender will jive well together. Take in your info, talk with them first or just chat over the phone – see how you feel after talking with them and go with your gut. Know your scores, know your DTI, know you credit history, etc. and tell them you really don’t want to run your credit yet and want go over your info. Believe me, if they don’t want to give you time, there’s about a 50 page section of mortgage brokers and lenders in any phone book. In other words – there’s plenty of competition and someone who will be willing to speak with you on a preliminary basis. Just realize that they’ve got to believe that you are serious, knowlegeable and that there is beneift in the process for them as well, otherwise they won’t want to spend much time wth you. Good luck!
Your best bet is to go to a mortgage broker then. He can pull one credit report and find the best lender for your situation. Just be careful so you don’t get ripped off on fees.
There are two type of credit inquiries. Hard inquiries which you authorize someone to look at your credit and soft inquiries which you didn’t initiate like those annoying pre-approved credit offers. Soft inquiries don’t hurt you. Hard inquiries usually wil not as well for something like a loan if clustered around a 30 to 60 day period b/c lenders know your shopping. All inquiries should be removed off you credit report as well if they are older than 2 years.
There are several mortgage comparison sites like http://mortgages.interest.com/index.asp. Usually good for comparing. Now a days, you may be able to also negotiate some of those fees as well.
You can shop for a mortgage loans without a credit check, you will need to indicate whether you believe your credit is poor, fair, good or excellent. Once you select a particular mortgage program, at that point, the lender will run a credit check with your explicit approval.
a quick quote does not require a credit score. you can even do your own quote at http://www.nationwide.co.uk They don’t charge a higher lending charge.