4 Things Homebuyers Should Know…
The Difference Between a Hard and a Soft Inquiry
Soft inquiries can be made with or without your consent and don’t affect your score. For example, checking your own credit score is considered a soft inquiry.
On the other hand, a hard inquiry occurs when you apply for a loan or a new credit card – and it can lower your score by a few points. However, lenders and creditors cannot make hard inquiries without your permission.
Why Credit Scores are So Important
Credit scores matter because lenders use them to help determine if they’ll extend credit and how much to charge you for that credit. Therefore, people with higher scores usually find it easier to borrow money and may enjoy lower interest rates on mortgages, car loans and other types of financing/
What do I Need to Know About Credit Inquiries?
Try not to do anything that could hurt your credit score while you’re securing a mortgage since a lower score could result in a higher interest rate or failure to get final approval on your mortgage. For homebuyers, this often means delaying significant purchases on credit, like new furniture or appliances, since this will trigger a hard credit inquiry.
Should I Only Apply for a Mortgage with one Provider
No, it’s always good to shop around for the best rate and terms on your mortgage, and it shouldn’t hurt your credit score if you make all your applications in a short period of time (aim for less than 45 days). The credit bureaus recognize such activity as “rate shopping”. They’ll typically group hard inquiries from several mortgage lenders and report them as a single inquiry.
Contact me and I can share more with you on securing a mortgage at the best interest rate.