Everything homebuyers need to know about pre-approvals and credit checks.
Today, we are excited to bring you some important information on pre-approvals, as we were recently joined by Chuck Simmons of Motto Mortgage Midwest. Understanding the pre-approval process is extremely important for anyone who wants to buy a house, so we’re happy to share this information today.
When Chuck and his team have a client who wants to start the pre-approval process, they will begin by meeting with them in person, over the phone, or online. Then they will get a summary of where they’ve lived, where they’ve worked, their income level, and if they have the money for a down payment. Then they will pull the person’s credit to find the right loan program and determine the next steps.
If a person still needs six months or more before they’re ready to act, they may be hesitant about getting their credit pulled. However, Chuck assured us that people don’t need to worry about that anymore. When he started in the industry 26 years ago, a person’s application would be sent to five or six investors, and all of them would pull the person’s credit. This would hurt their score but know that this doesn’t happen anymore.
Now mortgage companies pull the credit once, and the investors use that. Also, creditors know that when a person is shopping for a home, they’re only going to get one mortgage. It’s different than when people get multiple credit cards, for example. Therefore, they will correct people’s credit scores. Anything within a 45-day period will only count as one hard pull. This temporary dip can last for up to 120 days, but overall, credit checks don’t have the negative effect many people think they do.
Also, know that monitoring services aren’t always accurate. They can help you see if your credit score is going up or down, but they can’t give you a foolproof score. Sometimes people think their score is lower than it actually is, and vice versa. Therefore, go to people like Chuck for an accurate number.
If you have questions about this topic, know that you can call or email us anytime. Also, we would be happy to put you in touch with Chuck and everyone at Motto Mortgage Midwest. We hope to hear from you soon!