Get The Facts: Will Pre-Approval Hurt My Credit?

Getting mortgage pre-approval is one of the first steps toward buying your dream home. Pre-approval boosts the likelihood that the seller will accept your offer and gives you a detailed quote for your homebuying budget.

But homebuyers often hesitate because they think that pre-approval hurts their credit score. Will it?

The truth is that it will temporarily lower your score, as is true whenever a creditor pulls your credit report. But the benefits of getting pre-approved outshine the slight dip in your score. Read how.

Does a Pre-approval Impact My Credit Score?

A pre-approval usually requires a hard credit inquiry, although a soft inquiry is all that is needed for a pre-qualification. A hard inquiry can lower a borrower's FICO score by about five points or less. These lost points are typically recovered by keeping up with your on-time bill payment and maintaining your credit card debt low.

While every point matters in credit reporting, getting pre-approved is still one of the best actions you can take when looking to buy a home.

Benefits of Getting Pre-approved

Don't let the small dent in your score prevent you from getting a pre-approval! The advantages of getting approved overshadow any negative impact on your credit score. Here's how that breaks down

Help You Determine Your Ideal Price Range

Knowing how much house you can afford helps you concentrate on properties that fit your budget, saving you time during house hunting. We'll also review your application and, based on your verified income and assets, make sure that your approval aligns with your budgeting.

More Bargaining Power

A pre-approval letter will increase your negotiating power since real estate agents and sellers know that you have talked to a lender and are a serious buyer.

Faster Closing Time

Getting pre-approved can help speed up the closing process because much of your financial information is already in the lender's system. This is one of the reasons why famous financial advice personalities highly recommend getting a mortgage pre-approval.

Should You Get a Mortgage Pre-approval?

Getting a mortgage pre-approval is one of the essential steps in the home-buying process. While it's not mandatory, it shows sellers how serious you are about buying the property. Need to learn more? Contact us today for more information.

Customer service is very important to us. As we continue to improve and expand our services, we recognize our customers' need and desire to preserve their privacy and confidentiality. Safeguarding our customers' privacy is also very important to us. We have adopted standards that help maintain and preserve the confidentiality of customers' nonpublic personal information. The following Statement affirms our continued efforts to safeguard customer information.

Information We Collect

We gather nonpublic personal information about our customers as may be necessary to conduct business with our customers. We collect nonpublic personal information about you from the following sources:

Information we receive from you on applications or other forms, over the telephone or in face-to-face meetings, and via the Internet. Examples of information we receive from you include your name, address, telephone number, social security number, credit history and other financial information.

Information about your transactions with us or others. Examples of information relating to your transactions include payment histories, account balances and account activity.

Information we receive from a consumer reporting agency. Examples of information from consumer reporting agencies include your credit score, credit reports and other information relating to your creditworthiness.

From employers and others to verify information you have given to us. Examples of information provided by employers and others include verifications of employment, income or deposits.

Information We Disclose

Your personal information will only be retained for the purpose of providing you with our response to your query and will not be made available to any third party except as necessary to be disclosed to any related entity for the purpose intended or as required to be disclosed under law.

By submitting data on our website, the visitor is providing explicit consent to transmission of data collected on the website.

We treat data as confidential within our firm and require a strict adherence of all our employees to data protection and our confidentiality policies.

All visitors, however, should be aware that our website may contain links to other sites that are not governed by this or any other privacy statement.

We reserve the right to amend (that is, add to, delete or change) the terms of this Privacy Statement from time to time.