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When to get pre approved

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rated:
Starting to look at houses and after reading this forum for awhile, want to make sure my understanding is correct on this and there isn't anything I'm missing. 

With pre approval letters only being valid for 30-90 days and it being a sellers market in my area (New York), we could get pre approved now and not find a house, sign a contract and lock in a rate for another year or so since inventory is low.  With homeowners and realtors big on pre approvals,we could possibly have to renew our pre approval multiple times, digging our credit for then another hard pull to be done when we are ready to lock in a rate.  I know multiple inquires are lumped together, but only if done within a short period of time (14-30 days).  Since the process from pre approval to locking in a rate could take longer than that, is this my only option or is there something I'm missing?

We do have excellent credit (above 780) but still want to limit the number of inquires that would lower our score. 

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When you make an offer that's accepted by the seller.

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DTASFAB said:   When you make an offer that's accepted by the seller.
is there a market where sellers will look at an offer thats contingent on a mortgage without a preapproval?
We do have excellent credit (above 780) but still want to limit the number of inquires that would lower our score.
ask the lender what the min score required for the best rate is

rated:
Before approving them to pull your credit multiple times, find a loan officer that can supply new preapproval letters as needed without new credit pulls. Mine had no issue with new letter >12 months after initial.  Get the first approval at highest amount and highest ltv you may want, and they should be able to get you new ones exactly equalling your offer(s) without pulling credit again or going through approval process again.  Unlike prequalification, preapproval should mean it goes through underwriting, which means it probably takes up to two weeks and is not instant (unless i mixed the two up).
  
They only pulled my credit again after offer accepted and my inspection/unrestricted option period was over.  About a month after I closed on the house (now ~45 days after that referenced credit pull the week after offer accepted), I asked about a possible pre-approval for another purchase contract on an investment property (did not end up doing...) and the loan officer said they could even do a New preapproval using the same existing credit pull from when I bought the house, because it was under 90 days old.

rated:
rufflesinc said:   
DTASFAB said:   When you make an offer that's accepted by the seller.
is there a market where sellers will look at an offer thats contingent on a mortgage without a preapproval?
We do have excellent credit (above 780) but still want to limit the number of inquires that would lower our score.
ask the lender what the min score required for the best rate is

  Not really.  If a buyer puts in an offer with pre approval (which most everyone gets) there offer will look more favorable to the sellers.

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Inquiries cause minimal score changes. If your scores are in the 800s, 70 inquiries might cost you 8 points.

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otaymiester said:   Inquiries cause minimal score changes. If your scores are in the 800s, 70 inquiries might cost you 8 points.
  70?  That might drop you down to 500...for a while.

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forbin4040 said:   
otaymiester said:   Inquiries cause minimal score changes. If your scores are in the 800s, 70 inquiries might cost you 8 points.
  70?  That might drop you down to 500...for a while.

Not likely. If you are in the 800's it might cost you between 0 and 25 points.  

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stanolshefski said:   
forbin4040 said:   
otaymiester said:   Inquiries cause minimal score changes. If your scores are in the 800s, 70 inquiries might cost you 8 points.
  70?  That might drop you down to 500...for a while.

Not likely. If you are in the 800's it might cost you between 0 and 25 points.  

  More importantly, 70 inquiries will make some banks and/or CC issuers deny future applications just based on inquiries alone.

Having a higher score doesn't make inquiries affect you less.  It's mostly a subtractive equation.  25-50 might still be the max though, dunno what part of the whole score inquiries contribute (they're one of the smaller components).  Not 300 points and not 0 points.

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NY is a seller's market?

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Bend3r said:   
stanolshefski said:   
forbin4040 said:   
otaymiester said:   Inquiries cause minimal score changes. If your scores are in the 800s, 70 inquiries might cost you 8 points.
  70?  That might drop you down to 500...for a while.

Not likely. If you are in the 800's it might cost you between 0 and 25 points.  

  More importantly, 70 inquiries will make some banks and/or CC issuers deny future applications just based on inquiries alone.

Having a higher score doesn't make inquiries affect you less.  It's mostly a subtractive equation.  25-50 might still be the max though, dunno what part of the whole score inquiries contribute (they're one of the smaller components).  Not 300 points and not 0 points.

  Remember, there is no standard number of points per inquiry -- because the points are supposed to reflect rick based upon algorithmic analysis.

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Thanks to all for this discussion. I have found some useful information here which is very helpful for me.

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Bend3r said:   Before approving them to pull your credit multiple times, find a loan officer that can supply new preapproval letters as needed without new credit pulls. Mine had no issue with new letter >12 months after initial.  Get the first approval at highest amount and highest ltv you may want, and they should be able to get you new ones exactly equalling your offer(s) without pulling credit again or Hong through approval process again.  Unlike prequalification, preapproval should mean it goes through underwriting, which means it probably takes up to two weeks and is not instant (unless i mixed the two up).
  
Only pulled my credit again after offer accepted.


My CU was willing to do this as well. I eventually gave up on finding a place, so I let it "die" for now.

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lilckate29 said:   
rufflesinc said:   
DTASFAB said:   When you make an offer that's accepted by the seller.
is there a market where sellers will look at an offer thats contingent on a mortgage without a preapproval?

  Not really.  If a buyer puts in an offer with pre approval (which most everyone gets) there offer will look more favorable to the sellers.

That's an understatement if you're in a seller's market like ours currently.

When properties around here go at above asking price routinely due to bidding wars (most selling within a day or two, often before it's even in the MLS), no seller is gonna even glance at a non-preapproved offer. If that non-preapproved offer is in the ballpark of the other offers, why bother. It's a waste of time for everyone. And if the non-preapproved offer is much higher, seller will be suspicious that something is wrong with it. And again they'll pass it up. So in a seller's market, you pretty much have no choice but keep your pre-approval up all the time unfortunately. It's just a matter of finding the lender that will keep it for the longest and with the lowest cost for extensions.

As far as impact of credit record pulls, if inquiries are all done within a short amount of time, they get bunched up into a single one so that helps getting multiple quotes from various lenders so you can pick the one with the best rate and most favorable lock terms.

As a caveat, you could also take activity as an indicator of when to let your lock expire. If you got a 90 day lock now, I don't know if I'd get an extension in December considering how many properties will go on sale then. It may be best to pick things back up in Feb/Mar of next year.

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These days, preapprovals don't mean shit anyway. The last ten plus years those letters have been handed out like candy. I'd argue the only ones that mean anything are from CUs, where you go through underwriting and provide all of your documentation before they write the preapproval letter. That means something, because it means you have the funds secured rather than a "we see your credit is in the 700s, and you claim to have income above $X, so here's a preapproval for $900000000000000000."

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Having just gone through a home purchase I can give you my experience. I found a local lender for my pre-approval that said they would only have to pull credit once, and the letter should be good for a year. I ended up getting about 7 letters from this lender while I was putting offers in, and most of the time they could get me a new with updated house info and offer price in about an hour. Once I had an accepted offer I did some rate shopping and ended up with a different lender for my actual mortgage application (which was sold to another company before I even settled).

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Yes, in Long Island it is. 

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jaytrader said:   NY is a seller's market?
  Yes, in Long Island at least. 

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jaytrader said:   NY is a seller's market?
  In fairness, inventory is a little on the low side, and prices have been inching up.

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