How will seeking mortgage re-fi affect my score?

[Anonymous]

     Hi- I'm thinking about doing a straight re-fi on my mortgage (1 year old). My broker cold-called me, because I could drop my rate by almost 1%, and make up the difference in payments in about 14 months.

     My question is- how much of a hit will there be on my FICO score if I agree to this "fishing expedition"? If all goes through, GREAT. If not, what's my downside? I wonder what happens if I agree to look into this and it doesn't happen.

P.S.- (My FICO score just topped 800).

[Lel]

With a FICO score of 800, you should not worry at all about what the inquiry will do to your FICO score.  Sure, it might drop it by a dozen points, but your score will still be way up there and you will be able to qualify for the best rates of any loan that you seek.

You stand to save tons of money by going through a refinance.  It's worth the hit to your FICO score, even if your score were 50 points lower.  You can't buy groceries with FICO points.

Good job, by the way, on your FICO achievement.

[RobertEG]

My simple suggestion. 

If you re-finance with your current creditor, or even another creditor, they may just set up a new account, and the first month they report to a CRA after settelement, you will then have a new account listed on your credit report, with zero credit history. 
This would definately have a big FICO impact on your average age of accounts.

So here is my suggestion. 

Put in as a term of your refinance contract that any reporting of the refinanced account to any credit reporting agency will report either under the existing account reported to the CRAs, or alternately, if they want to assign a new account number, that the new account be reported with the same opening date of the original account being refinanced.  Then it wont mar your average age of accounts. 

PS:  If you bite, and app, it will only hit you for aprox 10 pts for the agrement for a hard inq.  But this wont hit you CR for another 2 months.  And inquires only affect FICO for one year.  Diminimus concern.

Sounds like a great deal. 

Mortgage companies today arent out "phishing" for dead fish.  If they made you this offer, I think that is not a scam, but an appreciation of your prior credit.  You are in the driver's seat.  Just get them to agree to what I have said, to that it doesnt erase the prior account from your age of credit history, and go for it!

No sweat off their back, and it will cover your FICO concern.

Message Edited by RobertEG on 12-22-2008 01:44 AM

Message Edited by RobertEG on 12-22-2008 01:57 AM