(Closed) Pre-Approval & Credit?

posted 6 years ago in Home
Post # 3
Member
7311 posts
Busy Beekeeper
  • Wedding: October 2011 - Bed & Breakfast

Yes, a hard credit pull by any entity will lower your score. It isn’t much, but if you are on the cut line for different interest rates based on your score, it could be just the nudge down that you don’t need. Wait until you are fully ready, then meet with several lenders all at the same time so that they pull your credit around the same time and all of those pulls will get lumped in as 1 pull by the credit bureaus.

Post # 4
Member
163 posts
Blushing bee
  • Wedding: June 2013

Getting pre-approved will not hurt your credit and I think it is a great idea. If nothing else it will let you guys know what you can afford. THat way you can decided to start looking or maybe it will encourage you to start saving more money for a house or find little ways to make extra money, like dog walking.

 

Can’t wait to hear how it goes.

Post # 5
Member
752 posts
Busy bee
  • Wedding: October 2011

@lovekiss:  I disagree with what you posted about all of the pulls will get lumped in as one.  Each pull even in the same time frame brought my DH’s score down by 5pts.

I would ask around to your family and friends to refer a lender.  I would contact that lender and explain how much your Fiance makes and debts.  That lender should be able to give you a ball park of what you’d qualify for without hitting your credit.  If that ballpark is way off from anything you’d be intersted in buying, then wait until you have a job too.  If that ball park is reasonable then go ahead and get pre-qualified so you can house shop.

Once you have found a house, get that same lender to work up the numbers.  Then go to other lenders and give them the figures including the credit score.  They can work up their best offer without pulling your credit again.  Go with whoever can get you the best loan.  Once you’ve decided, THEN tell them they can pull it and begin your paperwork to buy.

Be very direct and clear with the lender about when it is ok and not ok to pull his credit.  In fact, while you are shopping for loans, don’t even give his social out.  They can work up the good faith estimate without pulling his info.

Post # 6
Member
2106 posts
Buzzing bee
  • Wedding: September 2012

@MissNumbers:  Exactly what lovekiss said. If you want a general idea without affecting your credit score you can look online at what homes in your area are selling for and figure out how much debt and savings you have right now. Regardless of what a bank approves you for you should figure out how much house you can afford. 

Post # 7
Member
7311 posts
Busy Beekeeper
  • Wedding: October 2011 - Bed & Breakfast

Just to clarify, getting pre-approved does not tell you how much house you can afford. Rather, getting pre-approved tells you how much that lender is willing to lend you. They are 2 very different concepts. Lenders will approve you for an amount that will leave you eating ramen noodles, never taking a vacation, and never affording kids. Don’t believe their numbers. I posted in a thread a while back about how you can start determining what you can afford http://boards.weddingbee.com/topic/buying-a-house-seems-sooo-far-away . It may be helpful to you.

Post # 8
Member
330 posts
Helper bee
  • Wedding: September 2011

When we looked into a car loan and didn’t end up buying, it did lower our credit, but by less than 5 points.

We still haven’t bought a car. But we were 99% sure we were buying one, then the dealer was a jerk. Spending more than $1000 (so buying a house, car, big furniture purchases, etc) seems to involve more stress than I can handle. At least, without lots of chocolate.

Post # 9
Member
5786 posts
Bee Keeper
  • Wedding: May 2011

It does knock your credit score down 5ish point for one year. We were pre-approved by one lender and went through another for our mortgage and we had to attest to why there was a hard inquiry on our credit reports as part of the underwriting process.

@peanuthead:  great advice, when I was car shopping 18 months ago I wasn’t specific enough with the dealer and there were like 6 dings against my score.

Post # 10
Member
7311 posts
Busy Beekeeper
  • Wedding: October 2011 - Bed & Breakfast

@peanuthead:  That is really interesting (and kinda sucky for you. 🙁 ) We shopped 3 different lenders and our pulls were lumped into 1 record on our files. Maybe it’s because you had pulls outside of the 30 day window? Like we had our first round lumped together, but the second time our lender pulled right before closing, it counted as a seperate pull because it was beyond 30 days from the first time around. So we ended up with 2 pulls in total (the initial for pre-approval and the follow-up for underwriting).  

Post # 11
Member
752 posts
Busy bee
  • Wedding: October 2011

@lovekiss:  What you said is 100% true about figuring out what YOU can afford not going by what the bank says they will lend you.  This is so, so true.

My Darling Husband got the loan for our existing house since I had the loan for our first house.  The bank approved something ridiculous for him on his own!!  We weren’t even comfortable going that high with both of our salaries!

OP – be very aware of this too.  We are probably more conservative that most but we made sure to get a house that we can afford to pay with only 1 of us working.  Maybe the situation you are in now will be good financial practice for y’all.  Unemployment happens…take care to protect yourself so you don’t end up on the street!

Post # 12
Member
10367 posts
Sugar Beekeeper
  • Wedding: September 2010

A hard pull will lower it. However, there is a grace period of 2 weeks where you can shop different banks and the additional pulls will not bring it down further. Just make sure you shop around all at once – if you spread it out too much, you’ll get more dings. If it takes longer than 90 days to find a house, you’ll have to get re-pre-approved, and the whole thing will start again.

Post # 13
Hostess
1427 posts
Bumble bee
  • Wedding: November 1999

When banks pull your credit score; it will ding it.

You can figure out your debt to income ratio and then shop around for rates, especially look online, there’s a handful of great lendors that aren’t “brand name” but have AMAZING interest rates. They then bundle the loans and resell them immediately to a large bank.

Get your preapproval letter and enclose a copy of it in your offer package when you find a home you like; it definitely helps present a “stronger” offer when you’re up against multiple bidders.

 

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