When it comes to buying a home, getting a mortgage pre-approval should be your first step. The purpose of a mortgage pre-approval is to confirm your maximum purchase price. It acts as an important guide to both you and the lender as to how much you can afford. Getting a pre-approval for a mortgage means a lender has checked your information and “approved” your application to borrow up to a certain amount.
With that being said, a pre-approval isn’t a guarantee and you’ll still need to go through a qualification process that will verify all the information you’ve provided.
Key takeaways
- There’s nothing to prevent you from getting multiple pre-approvals from mortgage lenders, and it increases the likelihood you’ll find the best rates
- Just because you get a pre-approval from a lender, doesn’t mean you have to get a mortgage with them
- While there is no limit on the number of pre-approvals you can get, each one will come with a credit check which may temporarily impact your credit score
What happens if you’re considering multiple lenders or want to keep your options open? Can you get multiple mortgage pre-approvals at the same time?
The answer is yes.
You can have multiple pre-approvals at the same time, and in fact, it’s often a smart move done by savvy first-time home buyers and real estate investors. There is technically no limit on the number of pre-approvals you can get which makes shopping around with different lenders a no-brainer.
Here are key reasons to get pre-approved with multiple lenders
Comparing offers: When you go straight to your bank to get a pre-approval, there’s little incentive for them to give you the best mortgage terms. On the other hand, when you shop around with a mortgage broker, lenders are essentially competing against each other for your mortgage. If you already have a pre-approval from one lender, you only stand to gain from shopping around and getting pre-approved with more favorable terms.
Negotiating power: When putting an offer on a home, sellers like to see that a buyer is prepared and has the proper financing to follow through on their purchase. Having a pre-approval from multiple lenders could help you make a stronger offer.
Keeping your options open: The real estate and mortgage market can be unpredictable. Whether one lender suddenly withdraws their pre-approval, or if you want to get pre-approved for different terms, having alternatives ensures your home buying plans aren’t interrupted by last minute changes.
Common reasons for a lender withdrawing their mortgage offer can occur during their secondary check where something was flagged, such as undisclosed debt, or the offer expiring.
Does getting a mortgage pre-approval impact your credit score?
While there’s no limit to the amount of times you can get pre-approved, as part of the process lenders will perform a credit check which could impact your credit score.
With that being said, this impact is minimal and its effects should be temporary. If you already have a good credit score, getting two or three pre-approvals within a short timeframe shouldn’t negatively affect your borrowing options.
How many mortgage lenders should I apply to?
You only need a minimum of one mortgage pre-approval letter. Working with a mortgage broker can be advantageous, since you’ll have access to multiple lenders and only need to get pre-approved once. Keep in mind, a pre-approval letter can expire—it is typically valid for about 90 days.
In summary: There’s no significant downside to getting pre-approved from multiple lenders, and it can allow you to find a better mortgage offer.
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