How many inquiries are too many for a Mortgage

[Anonymous]

I have been rebuilding my credit and have a few questions regarding Inquiries, and mortgage approval. 

How many inquiries would a typical Underwriter deny you for, if it is just inquiries alone?

Here is my situation:

Tansunion no baddies: Score 731 - 6 inquiries, but 0 within the last year. .

Equifax no baddies: Score 732 - 16 inquiries, 3 within the last year ( thought there was only one, but there are 3) ( most of these inquires are rate shopping for a Auto loan, but they pulled twice, March 13 2009, and April 29th 2009. Those are half, 8 inquiries for the Auto rate shop Most will fall off in March 2011)

Experian? I checked it to make sure there isn't anything fishy, but only have 4 inquiries, 1 in the last year.

Will the excessive inquiries deny me? Are mine considered excessive? The rest are utilities, and apartment app. I remember reading about someone who was denied because of rate shopping for a mortgage.

I plan on using USAA for a VA home loan for about 200k here in Northern California.

I hope my scores will jump in the high 700's as I have 3 out of 7 cards reporting and 6 of 10 TL reporting, and about 24 percent UTIL if you do not factor in the Citi card because of no limit reporting, but if it is factored in. I have about 42 percent reporting. I am paying off 2 of the three cards, plus one installment by Aug, 23rd so I am HOPING to see a nice point jump going from 24% or and 3,400.00 revolving debt to 2 percent and 134.00, and two less cards reporting. Would love to see my scores in high 700's! But that is wishful thinking! HaHa.

So the mortgage pros, what do you think about the excessive inquiries? Will this deny me? I plan on preapproval in October 2010.

Thanks

[ShanetheMortgageMan]

Unless the lender has some funky guidelines regarding too many inquiries (such as Flagstar in the states of AZ & FL), then you should be OK.  

When there are no clear cut guidelines, and there is limited credit history or just limited good credit history, and they see a bunch of new inquiries, then they become more concerned.

It sounds like your credit history has sufficient depth for the inquiries not to be of much concern.  Just be prepared to explain what each of them were for, and you should be good.

[Anonymous]

Thanks for the reply!

I am just trying to get myself ready here for a Mortgage. I won't lie, I am scared to app, because I don't want to get denied. I hope that everything goes well, I know that I loved reading stories about every persons mortgage process so I will make sure I keep this up to date, and hopefully if there are bumbs in the road they get ironed out. I will be sure to update this process each step of the way.

Just wanted to thank myFICO for the advice I got from here, if it wasn't for myFICO, my scores wouldn't have been raised almost 100 points in 3 months. Thanks again.

[BrianB_The_Loan_Professor]

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@Anonymous wrote:

I have been rebuilding my credit and have a few questions regarding Inquiries, and mortgage approval. 

How many inquiries would a typical Underwriter deny you for, if it is just inquiries alone?

Here is my situation:

Tansunion no baddies: Score 731 - 6 inquiries, but 0 within the last year. .

Equifax no baddies: Score 732 - 16 inquiries, 3 within the last year ( thought there was only one, but there are 3) ( most of these inquires are rate shopping for a Auto loan, but they pulled twice, March 13 2009, and April 29th 2009. Those are half, 8 inquiries for the Auto rate shop Most will fall off in March 2011)

Experian? I checked it to make sure there isn't anything fishy, but only have 4 inquiries, 1 in the last year.

Will the excessive inquiries deny me? Are mine considered excessive? The rest are utilities, and apartment app. I remember reading about someone who was denied because of rate shopping for a mortgage.

I plan on using USAA for a VA home loan for about 200k here in Northern California.

I hope my scores will jump in the high 700's as I have 3 out of 7 cards reporting and 6 of 10 TL reporting, and about 24 percent UTIL if you do not factor in the Citi card because of no limit reporting, but if it is factored in. I have about 42 percent reporting. I am paying off 2 of the three cards, plus one installment by Aug, 23rd so I am HOPING to see a nice point jump going from 24% or and 3,400.00 revolving debt to 2 percent and 134.00, and two less cards reporting. Would love to see my scores in high 700's! But that is wishful thinking! HaHa.

So the mortgage pros, what do you think about the excessive inquiries? Will this deny me? I plan on preapproval in October 2010.

Thanks

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The banks dont usually go back that far when looking at inquiries - They are mainly concerned with hidden debt so anything that was inquired on from more than a few months ago that resulted in credit would already be reporting

Your scores are more than fine now high 700's wont make a lot if any difference to a bank for a mortgage

I know it will mean a sense of relief for you

No reason to be afraid of applying - even if you did get denied you would find out what the problem was and how you could fix it - and thats worse case

Good Luck

Brian

[Anonymous]

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The banks dont usually go back that far when looking at inquiries - They are mainly concerned with hidden debt so anything that was inquired on from more than a few months ago that resulted in credit would already be reporting

Your scores are more than fine now high 700's wont make a lot if any difference to a bank for a mortgage

I know it will mean a sense of relief for you

No reason to be afraid of applying - even if you did get denied you would find out what the problem was and how you could fix it - and thats worse case

Good Luck

Brian

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Thanks for the info on the inquiries Brian! I just talked with the Loan Officer as well today, been in contact with him for about 3 months now. He advised that I did not have to pay off the installment, and the fact that it is going to be paid off in less then one year it is not factored into ratios, so I will pay it off once I get approved.

Just a bit of info he told me today.

He told me that I didn't need to pay off the whole credit balance either and instead save the cash. We then thought it was best if I paid this one card down to 35 percent (making total revolving debt about 8 percent for revolving) and save the rest in the bank account. He advised that it better to have more cash sitting in the bank then actually putting it on the card since it wont drive my credit up that much since it is already pretty high for a VA loan. But, he said it was my call, and that it really wouldn't help/ hurt to do either way. I figured I'd save it in case of some unexpected bill comes up that I need to pay in the process of being a homeowner. They requested that I have at least a 640 but a 740 gets the best rates, and anything beyond that is just as good as a 740. I have to agree saving the money looks best because it doesn't look like I am strapped for cash, but I wanted to get my score in the high 700's around 775 or so in case I need to app somewhere else ( BIG IF) as well that my score doesn't go below that 740 range for the interest rate after the inquiries if they happened to be more then a month apart. I was only paying it to lower my DTI, because the CitI Card 65/month isn't factored into my UTIL, but I understand it could be looked in a different way in UW ( I understand 2k still affects me negatively)  so I am paying it down to 35 percent, vs.. 85 percent.

Do you think what he told me is a good idea?

Thanks again!

[BrianB_The_Loan_Professor]

Personally I would prefer reserves over higher credit scores especially for someone that has excellent credit to begin with

if the installment is less than $100 and less than 12 months then it wont count

B