How big of a hit if I get preapproved and not buy a house

[T2urtle]

Say I get preapproved by 3 diffrent banks this weekend for x amount of money on a home. Most lock up rates for 60-90 days. Then say I don't end up with one and stopped looking for another 6 months.

How big of a hit do I take to my score and how long to recover before I try again to get a solid rate?

My understanding is when I get my pre-approval. They make hard hits to my report and lower my score a fair amount temporary. I heard I need to wait a full year for my score to return back to what it was. But the bulk of the impact should recover about 6 months.

I want to get a house soon but seems like there are only a couple that might fit me currently.

 

[MikeyIs4Dcats]

it would be a hard pull just like getting a credit card. unless you have mediocre credit, I wouldn't sweat it, they know it's part of the process.

I'm not sure I'd bother getting prequalified by 3 banks though, unless you have a specific issue with the results of one.

 

[Red Squirrel]

I'm not aware it would be all that big of a hit if any. I got preapproved one year, decided to wait, then preapproved the next year and bought that year. Never really had any issues getting loans and stuff. For the first year I had quite a lot of debt till I got more settled in and paid them off. Renovations always tend to go over budget. That and my hardware store addiction. I can't step in one without spending a couple hundred bucks. Like a kid in a toy store, except I don't have my mom with me to say no.

 

[OCGuy]

They wont lock your rate unless you are in escrow on a property.

Also getting "approved" by walking into a standard big-name bank right now is a, like you mentioned, 60-90 process for refinances, and 30-60 for purchases.

Inquiries do hurt your score, but multiple inquiries for the same thing (yes they can tell if it is a mortgage or car or a CC your are applying for), in a short period of time, hurts it less than it used to.

 

[T2urtle]

it would be a hard pull just like getting a credit card. unless you have mediocre credit, I wouldn't sweat it, they know it's part of the process.

I'm not sure I'd bother getting prequalified by 3 banks though, unless you have a specific issue with the results of one.

I should have border line middle to great credit. Not perfect but small blemishes that are hitting the 7 year fall off mark. I'm easily 700+

Also getting approved... Are there any processing fees or doc fees? Or is this mainly of no cost.

 

[amdhunter]

You can expect to lose between 50-100 points for each inquiry. The worst thing you can do when looking for a house is get a pre-approval.


You really need to turn down the trolling a notch or two. It seems that you've been on 11 lately. (Though, the quality of your trolls has been turned down to about a 1.) -Admin DrPizza

 

[DeviousTrap]

You can expect to lose between 50-100 points for each inquiry. The worst thing you can do when looking for a house is get a pre-approval.

One inquiry will hit him 50-100 points? No way, with a decent credit history, it'll be much closer to 5-10 for hard inquiry.

Rate shopping is considering one inquiry too, so going to three banks won't hurt him 3x.

http://www.myfico.com/crediteducation/creditinquiries.aspx

How much will credit inquiries affect my score?
The impact from applying for credit will vary from person to person based on their unique credit histories. In general, credit inquiries have a small impact on one's FICO score. For most people, one additional credit inquiry will take less than five points off their FICO score. For perspective, the full range for FICO scores is 300-850. Inquiries can have a greater impact if you have few accounts or a short credit history. Large numbers of inquiries also mean greater risk. Statistically, people with six inquiries or more on their credit reports can be up to eight times more likely to declare bankruptcy than people with no inquiries on their reports. While inquiries often can play a part in assessing risk, they play a minor part. Much more important factors for your score are how timely you pay your bills and your overall debt burden as indicated on your credit report.

 

[T2urtle]

The worst thing you can do when looking for a house is get a pre-approval.

A lot of different people would disagree with that. Pre approval is normally like #1/2 after figuring out what u can afford.
Just because you can afford it doesn't mean one shall get a loan.

I'm expecting to get approved for more then what I want. But I'm only expecting, banks might say they don't like this and that.

 

[OCGuy]

You guys were trolled....

 

[boomhower]

You can expect to lose between 50-100 points for each inquiry. The worst thing you can do when looking for a house is get a pre-approval.

You either don't have a clue what your talking about or just being a dick.

OP: Unless your file is very thin the impact will be around 5-10 points. Depending on the exact FICO formula used you have 15-45 days where all mortgage inquiries will be counted as one for scoring purposes. They will all show on your credit report but will only be counted as one for FICO purposes. After six months the effect is reduced and after a year they do not count at all. They will remain on your reports for two years but stop counted against your score after a year.

Whether you need a pre-approval or not will vary with market and personal opinion. If your in a very competitive market a pre-approval can be vital in getting your offer considered.

 

[T2urtle]

I was told overall by 2 realtors so far that its just best to have a pre-approval because it shows that i'm serious about the place.

 

[OILFIELDTRASH]

If you're planning on buying anyways what does it matter? Otherwise don't waste peoples time.

 

[T2urtle]

I fully plan on buying a house. But it has to fit my needs and Ive explained this to both realtors I've worked with. I gave them detailed stuff. On things a like, didn't like, the I can work with and the hell no stuff.

I've found a couple listings and told the to check it out before wasting my time. I told them what I know I can afford and I don't care if I get approved for more.

They both seem to be working with me. So hopefully I'll be a homeowner soon

 

[arkcom]

You don't work with 2 realtors at a time. It just ain't right.