Profile picture for grnhays

Will trying to get a first time home loan,knock my credit score down?

I started looking into buying my first home over the winter.I went to a local credit union inquiring about the home loan.A grumpy old lady called and informed  me my credit score was 660 and she was not going to bother with my loan because i did not have a 20% down payment,and p.m.i. requires a credit score of 680 in WI.My credit score is now 682,woohoo for me!If I go apply for a loan,will my credit score get knocked below the 680 mark making me non eligible again? 
  • April 06 2011 - Suamico
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Answers (11)

Profile picture for grnhays
Thanks to all who answered!I appreciate all of your time you took out of your day to give me some advice.I was pre-approved for a mortgage today!!!!!
  • April 09 2011
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Many loan options are available for you.  We look at the middle score of the 3 different credit bureaus.  Many times Wisconsin credit unions will only pull Trans Union.  Best answer as provided by others is to work with someone else.  Good luck.
  • April 07 2011
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There are programs out there that you qualify for. The multiple inquiries you may make during the home loan process should not adversely effect your credit score.

My understanding is that as long as you do all your inquiries within a 10 day period they are treated as one credit pull by the credit reporting agencies. If you need more information talk to a good local lender.

As far as PMI goes, different lenders have different relationships with their PMI companies and depending on the banks servicing portfolio they can get better rates from the PMI companies. One thing I would advise you to do is to shop PMI rates first and then shop for your interest rates.
  • April 07 2011
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There are several loan options that are available for someone with a credit score over 640.  The down payment options range from 3.5% down on an FHA loan to 5-20% down on a conventional loan.  A mortgage lender or bank may have more options than your credit union, so it sounds like it would pay to shop around.  That being said, don't let them all run your credit.  Just ask for an estimate of closing costs/interest rate and talk to the loan officer about your credit, job, income.  Once you find someone you are comfortable with and who offers competitive terms, then stick with them and complete the process. Pulling your credit once or twice (in a two week period for the purposes of a mortgage loan) will not ding your credit. Don't apply for any new credit while you are in the process of purchasing a home (i.e. wait to buy a new car, furniture, etc until after you close on the house).  Good Luck!
  • April 07 2011
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When you are looking for a mortgage loan (and the same applies when you are looking for a car loan) the act of having your credit "pulled" normally will not lower your score. You do have a number of other great home loan options that require a lower down payment and will accept a lower credit score, including FHA, VA (if you are a veteran), USDA and Wheda. Call a reputable mortgage broker or mortgage banker in your town and ask them to explain what lending options you will have with your current credit score.  
  • April 07 2011
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There is only one way to find out, just go for it!

Conventional will have some pretty big pricing hits for that score range anyway and FHA will be better on rate, mortgage insurance is the same and you can go as low as 620 score and I believe 580 scores should be available any day now.

Once you do find out though, you should analyze what is affecting your score and work on improving that for the future.
  • April 07 2011
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Well, the credit union "grumpy old lady" was correct in that most mortgage insurance companies require a 680 credit score, but there are many other loan options out there for you that won't have to deal with this type of requirement.

I suggest you going to the Zillow marketplace and submitting a loan request.  If you have at least 3.5% down and a 640 score you should receive quotes for FHA loans.  Not sure why agents are telling you to go to lending tree...

As for your credit score dropping below 680, that's a possibility...a lender will have to review all 3 of your scores and will base your approval on the middle one. 

Good luck!
  • April 07 2011
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Profile picture for Brian French
I agree with Andy.  Look elsewhere for your loan and better service.  Any of us can help you find a much better lender...one who also has FHA, WHEDA and USDA loans

Happy house hunting
  • April 07 2011
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To answer your question, yes and no.

You might lose a couple points if you have additional inquiries, however, other mortgage inquiries within 90-120 days will not affect your score much because they are often interpreted and expected as you ought to be encouraged to shop around.  

What really makes your score drop due to multiple inquiries is when you go to apply for new types of credit too frequently when you are "maxed" out or go to a car dealer that has 5 or 6 banks pull your credit the same day or within a short time period. 

I'd recommend you find another lender, one that might be able to enlighten you regarding FHA or USDA loans depending on your income, savings and location.  

You have a qualifying credit score for purchasing a home but that's not the only requirement.
  • April 06 2011
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I also know 2 great mortgage bankers at LendingTree Loans you can contact.

[Contact info removed by moderator]

Good Luck!!!
  • April 06 2011
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Profile picture for DuaneMurphy
I would suggest that you talk to someone other than your credit union. Occasionally you will find more flexible credit/down payment options with other lenders.

Here is a lender that I work with that would be able to answer your questions and point you in the right direction. If nothing else he may be able to educate you more or give you some other options.

His name is

Barry Wood
Fairway Mortgage
[Contact info removed by moderator]

Best of Luck!!
Duane
  • April 06 2011
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