Time and time again, real estate agents recommend on getting a pre-approval before shopping for a home in the market. While it is definitely a wise thing to do, should you apply for more than just one pre-approval? Does it entail certain consequences?
Once you have finally made the decision to buy your own home instead of renting, one of the things you need to get done is to search for the best mortgage with best rates and terms. However, Realtor.com noted that while doing so can help you get the most out of your purchase, it can severely affect your credit score.
The publication stated that every time you apply for a pre-approval, the company pulls out your credit score in order to determine if you qualify for the said application. This means that with every application, your credit score is affected, especially if these companies do not pull out your credit score within a month.
The outlet then advised homebuyers to find the right balance between savvy shopping and over shopping. Mortgage adviser Jeremy David Schachter stated that while there is no magic number when it comes to the maximum pre-approval applications one can do, it may be wise to use your discretion when doing so.
Your credit score can be affected as much as 14 points or more every time a company checks your credit. Not only that, these hard pulls and deductions in your credit score can take as long as 90 days.
If you want to find out the best mortgage for you without letting your credit score take the hit, the outlet advised homebuyers on making sure that the lenders will pull out their credit file within a month in order for that to be counted as a single inquiry.
As previously reported here on Realty Today, getting a pre-qualification and pre-approval before home searching can definitely work to your advantage.
While there are already a couple of buyers, especially investors, who do full cash payments, getting pre-approved will also help increase your chances of getting the house.
