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Profile picture for dukulal

Shopping for mortgage. Confused.

Ok, its a good idea to get a quote from at least 3 lenders. Each of them want to pull up your credit reports to give you a quote.
Isnt it true that inquiries such as these will lower your credit score?
Initially I have got a quote from one broker, and then got from another one, who gave me almost 1% higher rate and $1500 more in closing costs. Should I try third one too?
  • April 14 2011 - Mason
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Answers (8)

Profile picture for josh120411
Hi,

This is a great question!  You do NOT need to pull your credit with multiple lenders, so don't.  Lenders that require your credit to be pulled upfront will almost always have higher rates/fees than lenders who do not.  Check out upfront lenders like Amerisave.com or centurypointmortgage.com.  You can get a quote on these websites without pulling your credit, you don't even have to talk to anyone.  Hope this helps!
  • April 18 2011
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Well if you have already pulled a credit report from one of the lenders then you should be able to use the scores from that credit report to shop for mortgage rates from other lenders. The brokers or lenders should be able to give you pricing assuming that the credit score you are providing is true and remains same or higher when they actually start the loan process and run their own credit. You should try getting a few more quotes to verify the current rates and if you are getting a good deal. You can use zillow.com mortgage place to do the same and generate quotes. Keep in mind the rates might vary and change from one day to another and sometimes a few times within the same day depending on Bond Market. Try shopping different brokers/ lenders within the same day to get a good idea.

As far as credit inquiries are concerned, if you are pulling credit for shopping mortgage rates with different lenders/ brokers within 20-30day window they are all considered as one. But if you run credits reports for shopping for other credits such as credit cards, auto loans, student loans within the same period are considered separate and will bring down the credit scores

Hope this helps! Good Luck!

  • April 18 2011
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When mortgage shopping (and for auto loans) only the first inquiry counts against your score. There are arguments about how many inquiries one can have over what period of time but if you were to have three in the same day (or even week) you can rest assured only the first one would count against your credit score.

Sincerely,
Greg

P.S. Mortgage "shoppers" often find out too late that they made a bad decision going with the cheapest option. Getting someone that really knows what they are doing, and can close on time (assuming it's a purchase) is much more important that the utmost, bottom-barrel price.

  • April 18 2011
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Profile picture for Mike Shirley
Here's an idea.  How about going online.  Check the rates a couple of the "big banks" .  Make particular note of the published "APR's" .  Now call a couple smaller lenders for thier rates and "APR's" until you find one or two that seem competent and professional.  

If you like the person and their rates and terms are competitive, then go with them.  These days competence, and professionalism are much more important that the absolute lowest price.  You would never go with the cheapest lawyer, doctor or investment advisor.  You shouldn't go with a lender just becuase they're cheap.  This is a business where you don't get what you don't pay for. 
  • April 18 2011
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I would recommend working with someone you feel comfortable with.  Technically, you could call one place and get a "quote" at 10, then call someone else at 2 and it would be different for several reasons.

1.  Pricing has changed as it always does.
2.  One of them doesn't know as much as the other
3.  It's not very accurate because they don't know all the details like score, ltv, term, etc...

In these situations, maybe the one with the lower rate is actually the same as the other but the time of day is different.  Or maybe, it doesn't really matter what they tell you today because tomorrow it will be totally different.

Or even worse than that is maybe the one with the higher rate and cost was actually the one just telling you how it is.  Loans are pretty straight forward these days.  Work with someone you like that will work hard for you and you can't go wrong.
  • April 15 2011
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The Bureaus enable you to inquire with multiple lenders/brokers over several weeks without taking a hit for multiple inquiries. That being said, if the data changes from 1 report to another, then the scores may vary. You can also get a slight variance due to a difference in scoring models within Fico. As stated, if the scores are recent and very close to each other, then most will give you a worksheet based on the score you give them verbally w/out pulling it. You stated the 2 quotes are 1% apart, is 1 for an Arm and the other for a fixed rate? If you want some feedback on the rate/fee you have received so far, list the credit score, loan amount, down payment, and type of loan ( conventional, FHA, USDA, etc).    
  • April 15 2011
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Dave is right. 

I will add that you can compare quotes from "borrower paid" and "lender paid" loan originators and you will see that slight difference in rate/fees so it is truly up to you to ask questions and discuss the alternatives to determine what loan is best for you.
 
I recommend any borrower talk with as many loan officers as you think you need to talk with in order to get comfortable working with someone in particular.  

However, you do need to realize that rates change twice a day so you can't compare rates and fees from quotes unless they are hours apart.  (the reason why you want to find one you can trust then get your credit pulled...)
  • April 15 2011
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Profile picture for daveskow
you should be able to receive quotes without  having credit report pulled



sure....when shopping / comparing ...get quotes form the different sources all on the same  day  and use the same criteria  so you can obtain a true apple to apple comparison
  • April 14 2011
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