Can Shopping For Mortgage Rates Lower Credit Scores?

Many home buyers and refinance mortgage loan borrowers needing a mortgage loan may go shopping for mortgage rates, especially refinance mortgage loan borrowers. I often get many phone calls from consumers if shopping for mortgage lower credit scores. Many mortgage loan applicants are told by mortgage brokers not to go shopping for mortgage because it will lower their credit scores every time a mortgage lender pulls their credit and many mortgage shoppers get frightened over these comments from mortgage brokers and stop shopping for mortgage and go with the mortgage broker that told them that shopping for mortgage rates lower credit scores. All mortgage loan borrowers should be able to shop for the best mortgage rates and terms. However, you should not have every mortgage lender you talk to pull your credit first. You should first interview your mortgage loan officer and see whether or not they can do your mortgage loan. If you have extenuating circumstances or credit issues, find out whether the mortgage lender has any mortgage lender overlays with the type of issues you have. Many mortgage lenders have mortgage lender overlays on credit scores, credit tradelines, verification of rent, collection accounts, and debt to income ratios. You will run into mortgage loan officers that will tell you that shopping for mortgage rates lower credit scores is a waste of time and you will just be lucky just to get a home loan. Home buyers and refinance mortgage loan borrowers with lower credit scores should still shop for mortgage and mortgage rates. Even if your credit scores are low and the chances are that your mortgage rates will be high due to your low credit scores, you need to feel comfortable not just with the mortgage lender but your mortgage loan officer as well.

Shopping For Mortgage Is Recommended

Mortgage loan borrowers should shop for mortgage, not just because to get the best mortgage rates but also to get a mortgage loan originator who they feel comfortable working with. The mortgage application and mortgage approval process can be an extremely stressful process and getting along with your mortgage loan originator is one of the most important factors. Every mortgage loan officer has different ways of doing business. One of the biggest complaints against mortgage loan originators is that they do not pick up their phones or return phone calls or emails in a timely manner. Some loan officers return phone calls and/or emails within 30 minutes of receiving messages from their borrowers and are available late evenings, holidays, and weekends no matter how busy they are. Feel free to talk to as many mortgage loan officers and pick their brains. See what you have in common together and test out the mortgage loan officer’s knowledge. Do not have the loan officer pull credit until you are sure that you feel comfortable with the loan officer and the company the mortgage loan officer works for. ¬†Once you feel comfortable that the loan officer may be the potential loan officer you may hire, then you can give the mortgage loan officer the green light to run credit. A mortgage loan officer needs to run credit in order to qualify you and pre-approve you.

How Will Shopping For Mortgage Lower Credit Scores?

Every time there is a hard credit pull, there will be an inquiry reported on your credit report and yes, it will drop your credit scores by a point or two. When you first shop for a mortgage loan, the first mortgage lender that pulls your credit scores will drop your credit scores. ¬†However, as more and more mortgage lenders pull your credit within a 30 day period, your credit scores should not be impacted. Maybe the first five mortgage credit pulls may drop your credit scores, but after then, your credit scores should not drop as long as it has been pulled in a 30 day window. Credit inquiries look very bad on a consumer’s credit report, however, if a mortgage lender sees that you had 12 credit inquiries in a period of 30 days from mortgage companies, they will understand that you were shopping for a mortgage.

The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

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