Multiple Pre-Approvals?

[ColoradoGal22]

To make a long story short I'm looking to buy a house and got in touch with my realtors lender last week. This lender (I'll refer to them as lender A) took all my information and got back to me with a pre-approval letter. I wasn't overly happy with what they came back with in terms of rates/fees and told my friend about it one evening over coffee. My friend told me it's a good idea to talk to multiple lenders and see what different things they can offer - then I can choose which is best. She also told me to make sure I do it within a 2 week period so it only counts as one ding to my credit score. Fantastic.

I started looking/researching lenders online and found a couple more that looked promising (Lender B, Lender C). Contacted them both and have my pre approvals in the works from them. One sounds too good to be true and the other is just what I wanted so we'll see how it pans out in the next couple of days.

My concern is that after reading some things online, I noticed several articles saying that getting multiple pre- approvals is a bad idea since other lenders will see the previous pulls and think you were denied. Does anyone know if this is the case? And if it's not a big deal do I just get to shop houses with whichever lender letter I liked best and cancel the other 2 out?

This is my first home purchase so any information would be very helpful. Thanks.

[Anonymous]

Hello, you can obtain as many pre-approvals as you want and it shouldn't matter. The lender you choose to go with will probably ask for a letter in wirting explaining what the inquiries were from. Just provide them with the real answer. There are deals out there that sound too good to be true, but it could be a legitimate offer. Sometimes companies run pricng specials. My suggestion is to try and narrow down the lenders you feel comfortable working with and sinply ask for their interest rate and what their origination charges total for that rate. You typically won't be able to lock in without a contract now so any offer will most likely change a bit from what you get now. 

Once you provide them with a purchase contract they'll generally be sending you a formal Loan Estimate and that'll list everything so that any "too good to be true" deal would be confirmed then. If it ws too good, then you'll have time to move on to another lender.  

Also, getting pre-approved doesn't lock you in with any lender. You're free to choose who you want to work with. Tell the other guys you chose to work with someone else and leave it there. 

[Anonymous]

Hi ColoradoGal-

I'm right there with you!   I have two preapprovals, and each lender knows i am examing the details of what they can offer me and the fees befeore deciding which way to commit.   They both know, both saw the pulls fo the other, and both said they welcome comparison.  My very clear message to them was "this is the largest purchase we will ever make, and of course we will want to compare." 

Once the Purchase Agreement is signed and you're ready to move forward, you'll have to pull the trigger one way or the other, I believe, because at that point you'll need to have the appraisal ordered.  I've heard tale of folks running two loan processes concurrently to ensure they close at a certain time, but I think if you've got a reputable lender and you feel good about the communication, it makes sense to go that way. 

Good luck, and let us knwo what you decide.

[ezdriver]

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@Anonymous wrote:

Hi ColoradoGal-

I'm right there with you!   I have two preapprovals, and each lender knows i am examing the details of what they can offer me and the fees befeore deciding which way to commit.   They both know, both saw the pulls fo the other, and both said they welcome comparison.  My very clear message to them was "this is the largest purchase we will ever make, and of course we will want to compare." 

Once the Purchase Agreement is signed and you're ready to move forward, you'll have to pull the trigger one way or the other, I believe, because at that point you'll need to have the appraisal ordered.  I've heard tale of folks running two loan processes concurrently to ensure they close at a certain time, but I think if you've got a reputable lender and you feel good about the communication, it makes sense to go that way. 

Good luck, and let us knwo what you decide.

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I compliment you on that transparent approach to selecting a lender to ultimately fund your mortgage. Good recommendation.