At CrossCountry Mortgage, we pride ourselves on being a reliable local mortgage provider, committed to empowering our clientele with a comprehensive understanding of the home loan process. We aim to inspire confidence in the selection of your loan and provide assurance that your homebuying team is trustworthy and communicative. Our extensive suite of loan offerings is designed to accommodate a variety of financial circumstances. However, if our services do not align with your needs, we respect your decision. It's imperative for both parties involved that you explore multiple lenders to identify the one most suitable for your situation.
Evaluating Different Lenders
The concept of exploring multiple lenders, though unconventional to some, is a standard practice in the homebuying journey. It's vital to ascertain that your chosen lender understands your long-term financial objectives and is committed to realizing them.
The Journey to Pre-Approval
Upon your first meeting with a lender, you'll be required to fill out an application. A licensed Mortgage Advisor will then evaluate various facets of your financial background, including your credit score, income, assets, etc. Using this data, they will discern the loans you are eligible for and grant pre-approval up to a predetermined limit. One reason we advocate for an initial consultation with a lender is to establish an affordable price range for your potential home. Suppose you receive pre-approval, but the interest rates are prohibitively high. In that case, you may seek a similar or identical loan at a more favorable rate, even if the original lender cannot meet your financial needs. A pre-approval merely suggests that under ideal circumstances, the lender could potentially approve your loan. However, as pre-approvals take place prior to the underwriting process, they do not assure a loan. At CrossCountry Mortgage, we strongly encourage borrowers to participate in our streamlined, innovative approval process to enhance their buying capability and assure potential sellers of their earnest offer.
Understanding Pre-Qualifications
Pre-approval should not be conflated with pre-qualification. Many lenders issue pre-qualification letters based on cursory questions regarding income, credit, and monthly debts. While a pre-qualification provides a rough estimate for house hunting, it is not a thorough examination of your financial situation. To prevent unforeseen issues during the homebuying process, we advise securing pre-approval or, ideally, full approval before visiting open houses.
Credit Checks Amidst Lender Selection
Although we encourage borrowers to compare lenders, it's important to note that each lender will need to access your credit score as part of the approval process. If you are still in the process of selecting a lender, avoid hard inquiries as they could lower your score. Maintaining a high credit score when finalizing your lender selection is critical, given that credit inquiries account for 10% of your score.
Key Information to Consider
According to the three major credit bureaus (Experian, TransUnion, and Equifax), a borrower's score will not decrease if the same mortgage lender pulls their credit multiple times within a two-week span. However, your credit may be impacted if you approach multiple lenders within a short period. It's noteworthy that not all credit checks carry equal weight; credit card applications have a more significant impact on credit scores than mortgage loans, as the potential for increasing debt is greater with credit cards.
Understanding Hard Inquiries
A hard inquiry occurs when a financial institution reviews a person's credit history while deciding on extending credit. Such checks are common during significant financial decisions, such as applying for a mortgage or credit card. Typically, third parties require authorization to perform a hard inquiry, which can lower your credit score and remain on your credit report for two years. Over time, however, the impact on the credit score decreases or vanishes. It's advisable to complete your mortgage shopping within a 14-day window to ensure inquiries are managed correctly, so the credit bureaus acknowledge the first credit pull but disregard subsequent ones.
Ready to begin the pre-approval process? Start online with our virtual application or connect with a local Mortgage Advisor today.
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