Each time a credit check is performed, your credit score will temporarily decrease. While your credit score will rebound, this process can take time and may interfere with your ability to qualify for a new loan. That is why it is so important to do some research before you begin the process of applying for a loan with different mortgage lenders. By choosing carefully when deciding which lenders to apply with, you will be able to avoid any unnecessary credit checks and the consequences that come along with these checks. Taking the time to consider the following three factors can help you to effectively narrow down your choices in mortgage lenders.
Factor #1: Any Home Buying Assistance You Will Be Receiving
If you are taking part in a first-time home buyer or other home buying program which offers assistance with the down payment or closing costs, you will need to consider any restrictions which come along with this assistance. For example, some home buyer assistance programs will require you to obtain a loan that is federally backed. This means that you will only be able to obtain your mortgage through a lender that offers these specific mortgage programs. Furthermore, you may find that not all lenders are willing to work with the particular assistance program that you are participating in.
Factor #2: Personal Obstacles To Qualifying
There are several common obstacles that could prevent people from qualifying for a mortgage through certain lenders. For instance, if you have nontraditional income, a minimal down payment, or a limited credit history, these situations could prove to be obstacles when trying to qualify for a mortgage. Thankfully there are mortgage lenders that offer custom loans that are able to help people get the funding they need even if they do not qualify for a traditional mortgage. If you will require this type of custom loan product, you will want to limit your applications to mortgage lenders who offer these products.
Factor #3: Ability To Get Pre-Approved Without A Hard Credit Check
While some mortgage lenders will require a hard credit check to issue a pre-approval letter, others will be able to complete this initial process with just a soft credit check. Since soft credit checks do not have a negative impact on your credit, it is possible to get a good idea of whether or not these lenders will approve your application without running the risk of damaging your credit score. Consequently, you truly have nothing to lose by choosing to at least explore the possibilities with these mortgage lenders.
Contact a mortgage lender in your area to learn more.
When was the last time you realized you were in the red financially? Although most people don't think about their finances on a day to day basis, it can be easy to find yourself living paycheck to paycheck if you aren't careful. I began thinking carefully about the financial implications of some life decisions I was making, and I knew I had to make a difference. I talked with a loan officer about getting things together, and he was instrumental in helping me to work things out. Read more about my financial successes and failures on this little website. You might be able to avoid some of my previous mistakes.