Shopping for the best Mortgage does not affect your credit!

[tm.88]

One of my clients is attempting to be approved for a mortgage right now. The company doing so has taken a very long time and still does not have a answer. We have had to do 2 amendments to the purchase contract because of this. When i had mentioned using a different broker that should take no more than 5 days i was surprised by my answer....

I was just curious as to how many people thought that shopping around for a mortgage would affect your credit as shopping around for the best credit card would....


I found this article that should explain everything for those interested.
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Credit Scores and Mortgage Shopping
When you apply for a mortgage your lender or mortgage planner will almost always check your credit. Most Canadian lenders use Equifax for this purpose.

Here are a few things you may or may not know about the process:

When a bank or mortgage professional initially checks your credit score, your score goes down.
According to a source at Equifax, your score can drop anywhere from roughly 5 to 20 points on the first mortgage inquiry.
After the first inquiry, a 30-day clock starts ticking. During this time you can have multiple mortgage inquiries without negatively impacting your score. But there's a catch.
The person making the inquiry MUST use Equifax's "mortgage code" when requesting your credit score. (If you're a mortgage professional you can tell if you're using the right code by checking if "FM" is in your Equifax member number. )
Mortgage planners from all the big broker firms use the mortgage code.
Big banks may or may not use the mortgage code, according to the Equifax rep we spoke with.
Credit unions often have their own unique code.
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Factoid: When a lender or mortgage planner pulls your credit, he/she sees your credit score before the impact of that inquiry. The next person to check your credit will see a different (lower) score because the first mortgage inquiry will have reduced it.


http://www.canadianmortgagetrends.co...-scores-a.html

[broken_legs]

So basically what youre saying is that id DOES affect your credit score.


The only way it wont is if you only use mortgage professionals who use the mortgage code AND use equifax AND do it within 30 Days.

Mortgage planners from all the big broker firms use the mortgage code.
Big banks may or may not use the mortgage code, according to the Equifax rep we spoke with.

My mortgage is with a big bank...

[HRD2PLZ]

I had a friend a couple years ago who shopped around to 3 different brokers before I found out and put and end to that. Her credit score was impeccable before all the inquiries so she was alright. It could really negatively impact someone who was already borderline or already had some "bruises" on their credit rating.

[Godfuader]

It may not adversely effect your score but alot of lenders dont view multiple hits a good thing. All it screams that you are credit seeking or shopping around. With no evidence of loyalty...non-commissioned lenders may just give you a generic rate, or ask you what rates you are getting, and simply match it.

[tm.88]

Originally posted by broken_legs
So basically what youre saying is that id DOES affect your credit score.


The only way it wont is if you only use mortgage professionals who use the mortgage code AND use equifax AND do it within 30 Days.



My mortgage is with a big bank...

no i am not saying this,

Thirty days should be plenty of time to research a mortgage that best suits you
The initial application may receive a bruise on your score however after that, pending you are browsing big names they will use the same application as the previous company.
Also, when viewed by a creditor for the mortgage they are not going to deny you because of a slight bruise on shopping.
Plus,
It may be worth taking a bump on the credit score to save a big chunk of coin stay in the pocket as long as it doesnt bruise you to the point of being turned down.

[lint]

Isn't that another plus of using a mortgage broker? They check your credit once, and then shop the information around to different lenders without having to check your credit again. There are some mortgage brokers on here, hopefully one of them pops into this thread to clear things up.