Should you get pre-approved by more than one mortgage broker/lender when buying a home? Why and why not?
One of the mortgage brokers I spoke with said that it doesn't hurt your credit score to get pre-approved by more than one broker/lender. But, if being pre-approved by a particular broker/lender doesn't actually lock you to that broker/lender, then is there a real benefit to getting pre-approved by multiple brokers/lenders? Does it incent them to give you better rates?
I'm looking to buy my first home, and would appreciate your guidance and experience. Thanks!
- rlloydevansLv 41 decade agoBest Answer
Getting pre approved simply gives both you and the seller a good feeling of what kind of a loan you can be approved for. You know the price ranges you can look for to get the payments you want, and the seller can feel good that you being pre approved shouldn't have problems getting financing.
Getting pre approved by more than one lender soes nothing to improve this. The one broker is probably hoping you'll get pre-approved with them, because they know that a preapproval means you are much more likely to get financing through him, which means he makes a commission.
But you have done what you needed, you are preapproved. You don't need more than that, going through additional brokers to get more preapprovals would just be eating up more of your time. Instead, you should now be concentrating on what house to buy.
My advice would be to get preapproved at one only, but you can still get information on loan programs through different brokers. That way, when you do agree with the seller on a particular transaction, you can go with the loan program that makes the most sense to you. You will have 2-3 days after the seller accepts your offer before you have to start formal loan processing, so you will have that time then to do your final homework and decision on what broker and loan program to use.
- godgedLv 71 decade ago
It doesn't really make sense to get pre-approved through multiple lenders, as there is no real benefit. The vast majority of lenders will expect you to shop around, so they put a good deal on the table the first time. It is nice to be able to put in an offer that the buyer is pre-approved, as it strengthens the offer.
Rate is not the only thing to consider, service of the mortgage broker, transaction fees, closing costs, pre-payment penalties, points, appraisal fees, late fees, anything that is going to cost you money. Get the best loan package from the best lender you can find.
Please stay away from internet lenders, they have no vested interest in making sure you are satisfied and close on time. Some internet lenders are great, do what they say they are going to do, when they say they are going to do it. Others pull a bait and switch, offering you great terms up front, but when the final documents come in, the terms change to a much less attractive package. Also, some lenders are missing closing dates, causing upset to the entire transaction, and some people are losing their earnest money due to the lender not being prepared at closing.
Being an informed shopper will help you avoid mortgage regret.Source(s): Oregon Realtor
- 4 years ago
Pre-approval is kind of general before you go home shopping. Once you make a deal you have to notify your lender, so they can proceed with the loan application and tell you what else you need. They should be able answer any of your questions. You did not mention if you even told your lender that you have an accepted offer. The lender would handle the appraisal, since that needs to be done by someone they trust, but you would end up paying for it. You have to hire whoever you want to do home inspection. You need to get some quotes and arrange for homeowner's insurance. You might want to hire a real estate attorney just to make sure everything is done right. I didn't find out until 12 years after I bought land that what I thought was the easement had never been in writing, had never been recorded, and was specifically excluded from title insurance. So the price of an attorney can be a minor cost compared with something potentially going terribly wrong later. PS: Jeromy is a little flipflopped on the appraisal, or maybe just the way he explains it. If appraisal comes in higher than your buying price, you are in the clear. If it comes in lower, you may need more down payment (so loan is not more than a set percent of value).
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- Etta PLv 41 decade ago
Wow, great question. If you are a standard conventional conforming borrower with good credit, stable income, and cash reserves then you have plenty to bargain with. I will share my 20+ years in the mortgage banking industry. First, if you don't need any "special" financial help then do yourself a big financial favor and use a well known national mortgage company, not a broker, because no one works for free. You will always pay more when a mortgage broker, who works on commission, submits your loan to a lender for approval. The spirit of healthy competition dictates that the conforming conventional 30 year fixed rates are similar in order to stay competitive( usually within .125% in rate) and are all based in one way or another on the bond market. No one lender will offer significantly higher or lower rates or they would go out of business. Mortgage brokers can only offer you "par" rate (no origination or discount points) by using higher rates to get paid "par plus pricing" by the lender whom will underwrite your mortgage loan. Rates can always be "bought down" by paying points (origination and/or discount). Your tax advisor can better go over whether paying a higher rate with no points or paying lower rate with points which one is best for you) I have included a websites from both FannieMae and Wells Fargo so you have as much information as possible to make the most informative decision. Good luck and congrat's to getting your first home!Source(s): www.fanniemae.com www.wellsfargo.com
- Anonymous1 decade ago
It's good to look around but know that the more people look into your credit score the more it drops so try like two or three places at the most.
- 1 decade ago
I don't know but can u tell me some tips on becoming a Broker/Realestate?
- ashtonLv 43 years ago
Hi, just wanted to say, I enjoyed this discussion. inspiring answers