Many of the properties we want to see require a pre-approval letter from a lender. We will have no problem qualifying for a loan, I just don’t know when to have the broker pull my credit.
One broker I talked to said they will not issue a pre-approval letter without pulling my credit. We don’t have a property in mind that we want to purchase, but want to have everything in order when we do go to buy. I just don’t want to have a ton of credit inquiries on my report.
Any thoughts on this one?
Your concern is well warranted. If you have recently checked your credit and feel comfortable with your scores and what is included on your report, then you will have to make a decision.
If you are serious about purchasing a property within the near future, 1-2 months then choose a broker and start the process. The credit pulls will not have that drastic af an effect.
The broker that you choose will probably have pretty good idea of what lender to deal with and if they pull your credit through them it will not need to be “re-pulled”
Good Luck!
your concern it warrented becuase some lenders seem to pull and re-pull your credit without concern for the affect on your score; especially if they shop your loan around. I have had this happen and it dinged my score by 20+ points.
The real issue is a lot of brokers are tired of dealing with people who are less than truthful since in the end if they pre-approve you and then the deal falls thru becuase they could not qualify, it rflects bad on the lender. The way to deal with this is build a relationship with one broker (or more). The guy I use I have done a half dozen deals in the past 3 yrs. and he knows I’m a straightshooter with excellent credit. I can call him and get a pre-approval letter in a few hours.
I would also suggest that you use the service of truecredit.com to keep up with who is pulling your credit.
They will email you if changes occur.
When dealing with a new lender, I take a copy of my credit report and tri-scores with me. I know before he
can actually process a loan he will have to pull my credit himself, but for now, I am showing him what I am about. (Credit report, scores and current financial statement.)
Now, the conversation needs to be about him and his programs. I will also tell him that he in fact does not
have permission to pull my credit until I say other wise, I use the true credit service and will know if you do.
Many loan officers try to use the whole credit pulling thing, to get you feeling committed to working with them. Inquiries do effect scores, and they have more of an effect on lower scores. Same type inquires pulled in A 30 day period count as one inquiry. If you think that you may need a back up plan ( and you do), have
two lenders pull credit.
If you are wanting to buy several properties, find a money source that can use the same credit report for
90 to 120 days and on more than one deal.
In about three weeks after the first money source pulls your credit have the second lender pull your credit.
Now, you have two sources and though two inquires, they only count as one. If you have chosen your money
sources wisely, you should not have more than 4 inquiries count against you per year, regardless of
how many purchases you do. And you will have two money sources to deal with at all time.
Most every loan officer will tell you that they can hang the moon and when they can’t, they will explain
how it is your fault. In fact, if you are talking to the right person, he will have already dealt with the
type of loan that you are needing and with people that have the same financial picture that you have.
He should be able to look your information over and know if he can get it done and for about what
terms.
It is best to have this person referred from another investor that is getting what you want.
Moneytalks
Hi Mackie:
Most lenders would require pulling your credit prior to issuing a pre-approval as it allows them to see if you have the adequate scores, tradelines, and other requirements for a particular loan program. However, some lenders will issue a pre-approval without pulling credit, but will include on the pre-approval letter that it is based on you (the borrower) having a 660 (or whatever it is) score. Obviously, the pre-approval will have more clout if there are no “conditions” to it.
And, as someone else has mentioned in these postings, within the 30 day time-frame, if the inquiries are within the same industry, they will count as one as opposed to seperate, as it shows you are a consumer that shops for the best deal. I wouldn’t not recommend having a lot of mortgage companies pull it, but a few will not hurt you.
And, as far as what another person mentioned, a broker may send your file out to shop for rates, but you can avoid this by using a direct lender. (not to be confused with a hard money lender…a direct lender is a mortgage company that acts as a bank as opposed to just a broker).
Hope that helps, and best of luck!