When should I get preapproval and will credit pulls hurt my credit?

by grahamteam-chime-me

The Graham Team recommends getting a preapproval completed prior to looking for that perfect home.

Getting preapproved gives you an idea of how much home you can afford. You will also have an idea as to how much money the lender will loan you so that you can be prepared for what is needed for a down payment and closing costs. Many of our clients are surprised on what they can qualify for. Some even qualify for more than they thought and others less than they anticipated. Being prepared keeps you in strong position when its time to make an offer.

Also, in Nevada, when an offer is made on a home, most seller require a preapproval to accompany the offer.

The Loan Approval Process is done in two-steps, the PRE-APPROVAL and then FINAL LOAN APPROVAL.

The Pre-Approval

It is a good idea to get the preapproval step completed early on so that if the lender needs additional documentation or additional information you have time to get that to them. The preapproval can generally be issued within 1-3 days after the lender has received a completed loan application. There are some situations that may require more time to get a preapproval completed such as when you are Self Employed.

The Final Loan Approval

The final loan approval process occurs during the time frame you are under contract for your home purchase. The sales contract, an appraisal of the home, verification of employment and last-minute credit updates are some of the things that occur during this time frame. Typically, this process takes 20 to 25 days, depending on how fast you are on providing the lender required documentation.

Will credit pulls hurt my score?

There are two different types of credit pulls: a soft credit pull and a hard credit pull.

Soft inquiries are used for an initial look at your credit history. These do not negatively affect your credit. On the other hand, hard inquiries can negatively affect your credit. While a hard inquiry will stay on your credit report for two years, it will usually only impact your credit for a few months. The impact can vary but typically will affect your credit about 5points for every hard pull.