When you’re buying a home, one of the most important decisions you’ll make is choosing a mortgage lender. While it may be tempting to go with the first lender you talk to, it’s important to shop around and get multiple mortgage quotes. But, how does this affect your credit? And when should you start looking for a mortgage lender?
When you apply for a mortgage, most lenders will pull your credit report, which can have a small negative impact on your credit score. However, if you shop around for a mortgage within a short period of time, typically 45 days, the credit bureaus will recognize that you are rate shopping and will only count it as one inquiry. So, getting multiple quotes from different lenders within a short period of time will not have a significant impact on your credit score.
Shopping around for a mortgage can have several benefits. First, it can help you find the best interest rate and loan terms for your specific situation. According to the Consumer Financial Protection Bureau, borrowers who get at least three quotes save an average of $3,000 over the life of their mortgage. Additionally, shopping around can help you find a lender who is a good fit for your needs and can provide the best customer service.
It’s recommended to start looking for a mortgage lender around 3-6 months before you plan to buy a home. This will give you enough time to shop around and compare different options, without feeling rushed. It also allows you to take the time to get your credit in order, if necessary.
If you need help finding a good mortgage officer please reach out and I can get you in touch with some amazing lenders!
- Consumer Financial Protection Bureau. (2021). Shopping for a Mortgage. https://www.consumerfinance.gov/mortgage/shopping-for-a-mortgage/
- National Association of Realtors. (2021). How to Shop for a Mortgage. https://www.nar.realtor/how-to-shop-for-a-mortgage
- MyFICO. (2021). How Multiple Inquiries Affect Your Credit Score. https://www.myfico.com/credit-education/credit-inquiries/multiple-inquiries
- Bankrate. (2021). How to Shop for a Mortgage: A Step-by-Step Guide. https://www.bankrate.com/mortgages/how-to-shop-for-a-mortgage/