06-01-2011 09:16 AM
Hi there. I have read on here about shopping for rates and if you shop around for rates, anything before 30 days won't be calculated and anything older than 30 days, so long as its done within the same 14 day period, will be counted as one inquiry. I hope I got that right. That sounds like if you actually want to get a mortgage right now, though. What if I just want to see how much I would be pre-approved for. How much does that hurt your credit score. This is the situation.
Where I live now, houses are going anywhere from $199,000 to $500,000. We are all over the place. My mother's plan next year is to move and sell her house. She is willing to sell it to me for cheap - $130,000. I think this would be an excellent opportunity for me. I would keep the house for about a year and then put it back on the market. I have a daughter that I would like to move out of this town by the time she is starting 5th grade. That means from next year to my plan year, it would be about 2 1/2 years.
My husband pays child support and has a student loan. Next June our car will be paid off but we do have cc debt that we are working on getting down. I don't want to get my hopes up on home ownership next year only to find out that I cannot afford it and then all my plans have to change. I also don't want to hold my mother up on her plans as well. So I would like to see what I am pre-approved for this year. If I am not even close to $130,000, then I know it won't happen next year. But if I am close, then I can really start making plans to make sure this goes in the right direction.
So to get to the original question, if I look to get pre-approved for a mortgage but don't actually apply for a mortgage, how much will that affect my credit score? Thanks for your help.
06-01-2011 09:53 AM
I recently had 2 hard inq's on all 3 bureaus (shopped 2 lenders) and it dropped my FICO about 6 points. That was a month ago, and Im back to where I was when I started. I had 10 on EX, 1 on EQ and TU before the pulls happened.
06-01-2011 10:08 AM
OP, knowing that rate shopping is important, FICO will take all of the mortgage inquiries when apping for a mortgage (and likewise auto inquiries when shopping for a car), and will only score one and ignore the rest. The time frame to do your rate shopping varies by CRA and FICO version used. I know for EQ FICO (Beacon 5.0...same as one here) the time frame is 30 days. I know that the time frame for the same TU FICO as found on here (TU98) is 14 days. I'm guessing that TU04, which is what most lenders use now is 30 days. I'm also guessing that the same EX FICO version that used to be on here (v2) or now on PSECU's website is 30 days as well, which is what most lenders are using. New versions via FICO08 are up to 45 days I believe. In other words, if you app 30 times in a 2 week period, FICO only dings you for one of those inquiries and ignores the rest.
Also, the damage of the inquiry will not hit until the last day of the inquiry window. There's a delayed reaction. I just got our first mortgage and had no inquiries reporting. It was interesting to pull my FICO scores so frequently (I was afraid of a 2nd pull which they never did) and noticed that precisely on the 30th day, I got a score hit of a few points on my EQ FICO due to that inquiry.
06-01-2011 10:09 AM
Thanks for your quick response. That doesn't sound too bad, especially considering I'm giving myself a year to get it up there. Good to know that it didn't hurt you. Thanks again!