How do you shop for mortgage?

Question

As the title implies, I am new to real estate and just last week, I called out a couple of mortgage brokers to see what kind of mortgage and rate I could qualify for. I wanted to do this without incurring a credit pull since I haven't decided whether this is a good time to buy a house (residential, for myself...not looking to make a profit or make it into a rental property). Anyway, so one of the brokers will be starting out with a new bank next week and was kind enough to tell me as much details without incurring a credit pull. Another broker (not sure whether he works for any particular bank) simply asked to provide all the info and he will give me a pre-approval letter.

I am sensitive to having multiple credit pulls even though my FICO is right around 800, but still I want to be able to compare rates from different sources/brokers. So below are some of my questions:

1) Will a broker working for one particular bank be at a disadvantage compared to one who can pull loan offer from multiple sources?

2) Can the rate change between pre-approval letter and actually buying a house? Or does a broker has to offer the rate on pre-approval letter?

3) Any tip to shop around for best rate without incurring too many credit pull.

Thanks!

Account Closed · Answer

When I was a loan officer for a Mortgage Broker, we had access to over three hundred companies that provided a loan for Single Family Owner Occupied. One credit pull and we could find the best set up for the client. I could sometimes give a full point lower from the wholesale side of the bank than a 30 year customer could get from walking into branch. Other times, I lost a client because they could get 1/16th of a point better elsewhere.

The rate has a "lock" and it all depends on your "lock" as to what happens with the rate. Your Loan Office can advise you.

And yes, the bank can decline to fund the loan a day before closing, because they can.  It's their money. You play by their rules. Their rules make little sense. Always remember, the bank is there to make money. Don't take it personally, they are not your friend.

Chris Mason · Answer

I pull my own credit, hard inquiry, at work, every 2 months. My mortgage-specific FICO is in the 820s.

I hate to be the bearer of bad news, but you need to get over it.