How is credit affected by a pre approval

5 Replies

I am looking for input on how your credit is affected by a pre approval.  For example you get pre approved and don't find a property within the window that the respective bank has.  You then have to get pre approved again.  Does this negatively affect your credit?

@Josh V. getting a pre approval is just that "Pre".  Based on the paperwork you provide and the preliminary credit report they will give you the Pre-approval.  They will run your credit again when it is time to do a commitment on a specific property.  So that's two dings, plus another pull around the time of closing.  you can expect at least 3 hard inquiries during the process.  if your per-approval expires they will run an additional CR.  to reinstate the document.  

Credit bureaus do not penalize you very much for shopping for mortgages They cut some slack and understand that people are allowed to shop around and it would only be a few points . 

Thanks @Shawn Ackerman and @Steven Picker .  I also just called a couple of bank and they said their turnaround for getting a letter to go with an offer is within a couple of hours.  So it seems that I would be best to wait until I find a property.

Just be aware, a preapproval you got within a couple of hours on the phone, won't hold much weight with an informed agent.  This means you didn't submit tax returns, a current w-2, bank statements, etc.  It means the lender just checked your credit, and "took your word" for everything else.

IMO, a pre-approval that is not specific to a given property is worthless.

I want to see the bank approving a loan on the specific property at the agreed sales price and upon appraisal.  

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