topic Re: Question on the impact of mortgage inquiry to a low MMS in Mortgage Loans

Question on the impact of mortgage inquiry to a low MMS

greenthumb2020 — Fri, 07 May 2021 21:18:58 GMT

Hi folks,

Hypothetical question as I continue rebuilding and prepare for a mortgage.

I had my second to last charge off report as paid after completing a settlement offer. The account has been updated across all three bureaus and today I pulled the trigger on my monthly 3B report to see where my mortgage scores currently stand. My MMS has crossed the 580 line by one single point. I received a settlement offer for the final charge off that I intend to take advantage of in the near future and I anticipate at least a slight increase in score based off of my experience paying off other accounts that charged off around the same time, but I wanted to get some input on the following hypothetical scenario.

My question is regarding the impact of a mortgage inquiry when I begin shopping around. If my middle score remained at 581 after payng the final account and I start shopping around, is it possible that initial inquiry could lower my score by a few points and make me ineligible for the FHA 580 threshold assuming I continue rate shopping after the inquiry hits? TIA!

Re: Question on the impact of mortgage inquiry to a low MMS

dragontears — Fri, 07 May 2021 21:25:51 GMT

@greenthumb2020 wrote:
Hi folks,

Hypothetical question as I continue rebuilding and prepare for a mortgage.

I had my second to last charge off report as paid after completing a settlement offer. The account has been updated across all three bureaus and today I pulled the trigger on my monthly 3B report to see where my mortgage scores currently stand. My MMS has crossed the 580 line by one single point. I received a settlement offer for the final charge off that I intend to take advantage of in the near future and I anticipate at least a slight increase in score based off of my experience paying off other accounts that charged off around the same time, but I wanted to get some input on the following hypothetical scenario.

My question is regarding the impact of a mortgage inquiry when I begin shopping around. If my middle score remained at 581 after payng the final account and I start shopping around, is it possible that initial inquiry could lower my score by a few points and make me ineligible for the FHA 580 threshold assuming I continue rate shopping after the inquiry hits? TIA!

The good news is that, if coded properly, mortgage inquiries don't affect your scores until ~30 days (might only be 15 for EX).

With a MMS that low I would talk with any potential lenders to make sure that they will actually be able to do a loan with that MMS as not many lenders will go that low, before allowing them to pull your credit.

If a lender won't tell you what their minimum MMS is without pulling your credit, walk away from them.

Re: Question on the impact of mortgage inquiry to a low MMS

greenthumb2020 — Fri, 07 May 2021 21:33:18 GMT

@dragontears wrote:
@greenthumb2020 wrote:
Hi folks,

Hypothetical question as I continue rebuilding and prepare for a mortgage.

I had my second to last charge off report as paid after completing a settlement offer. The account has been updated across all three bureaus and today I pulled the trigger on my monthly 3B report to see where my mortgage scores currently stand. My MMS has crossed the 580 line by one single point. I received a settlement offer for the final charge off that I intend to take advantage of in the near future and I anticipate at least a slight increase in score based off of my experience paying off other accounts that charged off around the same time, but I wanted to get some input on the following hypothetical scenario.

My question is regarding the impact of a mortgage inquiry when I begin shopping around. If my middle score remained at 581 after payng the final account and I start shopping around, is it possible that initial inquiry could lower my score by a few points and make me ineligible for the FHA 580 threshold assuming I continue rate shopping after the inquiry hits? TIA!
The good news is that, if coded properly, mortgage inquiries don't affect your scores until ~30 days (might only be 15 for EX).
With a MMS that low I would talk with any potential lenders to make sure that they will actually be able to do a loan with that MMS as not many lenders will go that low, before allowing them to pull your credit.
If a lender won't tell you what their minimum MMS is without pulling your credit, walk away from them.

Solid answer - thank you!

That makes sense and is encouraging. I've definitely been keeping tabs on this area of the forum and reading about peoples' experiences with less than stellar scores attempting to get loans given the current climate so that is great advice. As I mentioned, this is hypothetical at this point and I'm hoping to net a few more points by getting this sucker paid off.

Re: Question on the impact of mortgage inquiry to a low MMS

Michizane — Fri, 07 May 2021 21:53:25 GMT

Just applied for mortgages from 2 lenders, and they both pulled my middle score at 666. Even though on pulled my credit yesterday and the other was today. Once you decide the lenders you will go it make sure to apply for them in the same window of like 2 weeks.

Re: Question on the impact of mortgage inquiry to a low MMS

Anonymous — Sat, 08 May 2021 02:21:45 GMT

Yes mortgage inquiries are buffered by 30 days and the de-duplication window is 14 days EX2 & 45 days for the other two!

see the New Credit section of the Scoring Primer linked at the top of my signature for more details slides graphics etc.