To get the best mortgage possible for your situation, you may need to shop around with lenders. Shopping around for a mortgage can help you see your options and help you find a great mortgage, but have you ever wondered how this will affect your credit? Your credit plays a huge role in the mortgages you qualify for, and here are a few things to understand about the way shopping for a mortgage can affect your credit.
The effects of hard inquiries
There are two main types of inquires that are made to credit reports, and each type has different effects on your credit. The first type is called a soft inquiry, and this type does not cause your credit score to decrease. The other type is a hard inquiry, and this type will typically cause your score to decrease. The only times hard inquiries are made to your report is when you apply for credit. Soft inquiries are often made by lenders who are looking for people to offer loans to.
When you apply for a mortgage loan, the lender will not immediately pull a hard inquiry on your credit report. They may initially run a soft inquiry, simply to get an idea of where you stand financially. Lenders cannot run hard inquiries without your permission, and you will have to supply your social security number for this to take place.
Tips to minimize these effects
If you want to get the best mortgage loan available, you may want to get all your paperwork together and apply for mortgages with several different lenders all at once. Credit bureaus are now taking into consideration the way people "shop" for the best mortgage. Because of this, the credit bureaus typically only decrease your score once even if there are multiple credit reports pulled. The important thing to know is that you should time this right so all the hard inquiries are made within a short amount of time. Some credit bureaus have a 14-day time frame for this, while others may have up to 45 days. The best thing to do is have all the lenders pull your report during the same week.
If you are ready to apply for a mortgage so you can buy a house, you should contact a lender to find out how to go about doing this. To learn more, visit a mortgage lending website or call one today.
To learn more, click here: I Want A Better Mortgage
Share19 April 2017
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