First Time Homebuyer

[Anonymous]

I just decided that I have had enough of living in apartments and want to buy my first house in the same area I live at the moment (prefarrably within the next 2 months). I make roughly 40k per year and want to buy a house for up to 120k with 30% down (can be more, if necessary). Fico scores should be near the 760 border and there are no debts, so I'm not overly worried about not getting a mortgage. My rent is $712 per month, so this should be fine.

Now, as far as I have read so far, it is recommended to get a mortgage pre-approval before starting the search for houses. It seems also to be recommended to shop around for the best rates. One point I did not understand completely: When do the hard pulls for the mortgage actually take place? I do not want to trash my credit already in the "shopping around" phase.

[ShanetheMortgageMan]

A hard inquiry will only be needed if you want to go through the pre-approval process/officially apply for the mortgage, it is usually done at the same time the loan application is completed.

http://www.myfico.com/crediteducation/creditinquiries.aspx

What to know about "rate shopping."

Looking for a mortgage, auto or student loan may cause multiple lenders to request your credit report, even though you are only looking for one loan. To compensate for this, the score ignores mortgage, auto, and student loan inquiries made in the 30 days prior to scoring. So, if you find a loan within 30 days, the inquiries won't affect your score while you're rate shopping. In addition, the score looks on your credit report for mortgage, auto, and student loan inquiries older than 30 days. If it finds some, it counts those inquiries that fall in a typical shopping period as just one inquiry when determining your score. For FICO scores calculated from older versions of the scoring formula, this shopping period is any 14 day span. For FICO scores calculated from the newest versions of the scoring formula, this shopping period is any 45 day span. Each lender chooses which version of the FICO scoring formula it wants the credit reporting agency to use to calculate your FICO score.

[Anonymous]

Thanks. I guess I will try to do something on the same day then.