I'm embarking on my BRRRR journey but keep getting stuck with the same question. How do I refinance the houses I plan to acquire without constantly taking a hit to credit due to multiple credit pulls?
Most people get caught up over having people pull their personal credit. They worry about having perfect 850 score constantly instead of 770 which is good enough to get the approval for the loan. As long as the properties are cashflowing and you are making your monthly payments, there isn't a lot to worry about. Most banks give people with credit scores in the 740-760+ their best rates. The extra 90 points mean very little in any credit making decision. I'm going to treat a borrower with 850 and 770 the exact same; both of which are great credit scores.
@Josh Daniel purchase the home with a hard money lender. Go in and rehab the home. Refinance with a traditional lender at a higher value when you are done.
Most people get caught up over having people pull their personal credit. They worry about having perfect 850 score constantly instead of 770 which is good enough to get the approval for the loan. As long as the properties are cashflowing and you are making your monthly payments, there isn't a lot to worry about. Most banks give people with credit scores in the 740-760+ their best rates. The extra 90 points mean very little in any credit making decision. I'm going to treat a borrower with 850 and 770 the exact same; both of which are great credit scores.
First off, no matter what it is always great to have good personal credit as it does impact things like insurance rates and HELOC rates which could impact your cashflow going forward.
You have a 45 day window from the day of the first mortgage inquiry to shop for mortgage rates without having subsequent mortgage inquiries damage to your credit profile. This is for homes only and does not pertain to autos and such.
In regards to keeping your score high, you would be best referencing Experian's website on how your credit score is determined.
Easy items are : Keep credit card utilization below 30% avoid new accounts and let accounts reach 5yrs+ Have a mix of installment, revolving, auto and mortgage history No missed payments, collections etc
On the fix and flip sometimes no credit check is needed if the purchase + rehab has the ARV. I've seen places ignore credit there, but for a 30 year loan everyone checks credit.