topic Re: Applying for more than 1 pre-approval. in Mortgage Loans

Applying for more than 1 pre-approval.

garland865 — Sun, 22 Feb 2015 16:58:46 GMT

What negatives or red flags would there be for applying for 2 pre-approvals at the same time. I have a relative that is a mortgage consultant with a major bank which I will be applying with but I have heard there could be a lot of issues with the approval process plus I would like to make sure I get the best rate.

Re: Applying for more than 1 pre-approval.

ezdriver — Sun, 22 Feb 2015 17:16:39 GMT

There is no value to securing multiple preapprovals and the rate only matters when you are able lock a rate.

Re: Applying for more than 1 pre-approval.

Anonymous — Sun, 22 Feb 2015 20:44:02 GMT

Garland made this observation-

"I have a relative that is a mortgage consultant with a major bank which I will be applying with but I have heard there could be a lot of issues with the approval process plus I would like to make sure I get the best rate".

You sure you wanna mix business and family???

Re: Applying for more than 1 pre-approval.

Revelate — Sun, 22 Feb 2015 21:55:49 GMT

@ezdriver wrote:
There is no value to securing multiple preapprovals and the rate only matters when you are able lock a rate.

Getting an additional pre-approval may not make any difference (since that's really all that's needed pre-offer); however, since that's something of a necessary step for applying with a lender, one should be using another for a hedge in both rates and in protecting oneself from a lender that proves that cluster is only half a word, so why not rate shop?

Or is this based on the theory that if you're attempting to pull the trigger quickly that banks trip over themselves in getting your file processed?

Re: Applying for more than 1 pre-approval.

Lemmus — Sun, 22 Feb 2015 23:54:06 GMT

@garland865 wrote:
What negatives or red flags would there be for applying for 2 pre-approvals at the same time. I have a relative that is a mortgage consultant with a major bank which I will be applying with but I have heard there could be a lot of issues with the approval process plus I would like to make sure I get the best rate.

...the only possible negative is that each prospective lender will do a hard pull ...but if all of those mortgage inquiries are within 30 days of the others, the scoring will count them as a single inquiry.

...its not really the pre-approval per se that matters but the benefit of applying with multiple lenders to learn which not only offers the best rates but which is responsive to your questions and offers good advice/assistence in the process ...I currently have 3 pre-approvals and believe me, the difference between the LOs and processes is drastic ...the rate is very important but my experience has been that having someone that answers their phone/e-mails in a timely manner is just as important, if not more so.

...think of it as asking for bids for some remodeling work ...would you only ask for one? ...I wouldn't.

Re: Applying for more than 1 pre-approval.

skigirl916 — Mon, 23 Feb 2015 00:24:42 GMT

Do what I did. Go through the pre-approval process with one lender, in which they pull your mortgage credit scores and tell you them, and then shop around with those scores in hand to see if you can get a better rate. If you can, then go through the process with the better lender.

In my case, no one could beat my lender, so I didn't need to go through the process with anyone else.

Re: Applying for more than 1 pre-approval.

frugalQ — Mon, 23 Feb 2015 04:40:35 GMT

When shopping around, make sure to discuss specifics regarding your financial picture. Lender overlays may impact whether you will be able to be approved through them or not.

Re: Applying for more than 1 pre-approval.

StartingOver10 — Mon, 23 Feb 2015 13:37:18 GMT

There is more to shopping than just the interest rate. There is a substantial difference in closing costs between lenders - and rate. So make sure you check both with your target lenders. Also as frugalQ points out, they have different overlays and one lender may do the loan with your criteria and another may have an overlay that knocks you out of the box. Find out before you make application.

Getting one quote is taking a risk that the lender you selected is the right lender for you. How do you know the costs if you don't get a couple of quotes? Big box banks are very conservative at the moment (read: picky).

Re: Applying for more than 1 pre-approval.

ezdriver — Mon, 23 Feb 2015 20:20:34 GMT

@Revelate wrote:
@ezdriver wrote:
There is no value to securing multiple preapprovals and the rate only matters when you are able lock a rate.
Getting an additional pre-approval may not make any difference (since that's really all that's needed pre-offer); however, since that's something of a necessary step for applying with a lender, one should be using another for a hedge in both rates and in protecting oneself from a lender that proves that cluster is only half a word, so why not rate shop?

Or is this based on the theory that if you're attempting to pull the trigger quickly that banks trip over themselves in getting your file processed?

My reasoning [having been a mortgage broker for many years] is that quoted rated means nothing until one is in a position to lock a rate. That form or "rate shopping" to me is useless given the multiple times one's credit gets pulled.

That said, it makes sense to shop around for fees, process, inhouse underwriting etc. Those things matter post application and during underwriting.