Personal Finance

Mortgage Pre-approval affects credit score?

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  • Jun 5th, 2013 1:26 am
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[OP]
Newbie
Jan 13, 2013
2 posts

Mortgage Pre-approval affects credit score?

Does getting a mortgage pre-approval affect your credit score in Canada?
28 replies
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Dec 3, 2012
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RICHMOND HILL
Yes.. They had to check your credit to pre-approve you.
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Dec 1, 2011
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One inquiry isn't going to hurt you enough to worry about. A few points at best. If you've been rate shopping for mortgages, all those inquiries are suppose to be considered one within a certain time frame (30 days I think???).
Can you believe it? They sent my income tax return forms back to me! In response to question # 4, "Do you have any dependants?" I replied - "2.1 million illegal immigrants, 1.1 million crack heads, 4.4 million unemployable people, 901 thousand people in over 85 prisons, and 650 idiots in Parliament.
Apparently, this was NOT an acceptable answer.

Who the hell did I miss? :razz:
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wayne74 wrote:
Jan 14th, 2013 4:37 pm
One inquiry isn't going to hurt you enough to worry about. A few points at best. If you've been rate shopping for mortgages, all those inquiries are suppose to be considered one within a certain time frame (30 days I think???).
+1

If you get them within a short period of time, it won't have a big impact on you. However, if you are shopping around and you are getting random inquiries over a longer period of time, then a) it will have a bigger impact b) you might have issues obtaining additional credit if needed later
Member
Dec 22, 2012
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Mississauga
now technically if you do them in a very short period of time though, you might get by, as equifax only updates your report every 3 months... but its a catch 22 situation :s
Sr. Member
Jan 19, 2009
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just curious what is a mortgage pre approval? In the past before I bought my first home I went into my bank a few months prior to inquiry about this...they mention they can't really pre-approve a mortgage if there is property i have offered to purchase. How do they qualify you for a mortgage without knowing anything about a property?
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Apr 6, 2008
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enter wrote:
Jan 15th, 2013 2:18 am
just curious what is a mortgage pre approval? In the past before I bought my first home I went into my bank a few months prior to inquiry about this...they mention they can't really pre-approve a mortgage if there is property i have offered to purchase. How do they qualify you for a mortgage without knowing anything about a property?
The lender only pre approves you for a certain amount of mortgage by taking in to consideration a hypothetical price of a house and use 1% or more as property tax and $100 or more as utilities costs and calculate your GDS/TDS ratios based on your income and debts. And of course, they do take your credit also in consideration. However, this pre approval is generally a rate lock for the amount they approve you and you get mortgage provided you satisfy all the conditions once a deal becomes live.
Pramod Chopra
Mortgage Alliance Co. of Canada
www.pramodchopra.com
Broker License # 10530
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xhalo21 wrote:
Jan 15th, 2013 12:48 am
now technically if you do them in a very short period of time though, you might get by, as equifax only updates your report every 3 months... but its a catch 22 situation :s

That's gotta be one of the funniest things I've ever heard :facepalm:
That's right up there with someone's belief that Equifax owns Transunion :facepalm:

The fact is, your credit file is updated as Equifax and Transunion receives the information from creditors, normally on a monthly cycle. If you have lots of accounts, your credit file can be updated several times each month, as lenders report at different times throughout the month.
And for your information, inquiries are placed on your credit file immediately once your credit has been pulled by the lender.
Thanks for the good laugh though, you made a grumpy Tuesday guy chuckle!
Can you believe it? They sent my income tax return forms back to me! In response to question # 4, "Do you have any dependants?" I replied - "2.1 million illegal immigrants, 1.1 million crack heads, 4.4 million unemployable people, 901 thousand people in over 85 prisons, and 650 idiots in Parliament.
Apparently, this was NOT an acceptable answer.

Who the hell did I miss? :razz:
Newbie
Nov 25, 2012
13 posts
3 upvotes
Milton
Further to Promod's point some banks don't even pull your credit. They just do a short interview and pull the figures in based on what you've told them to see the numbers fit into the GDS/TDS ratios. This really isn't a pre-approval but a pre-qualification. If you're going shopping for a house be sure that they do pull your credit to know every detail but the property so you know you can actually close. OR better yet, use a broker.

To the OP everyone is right in that your initial inquiry will lower your credit score by a few points but nothing to worry about unless you're teetering on the cut off. According to Equifax if you have your bureau pulled multiple times within a 30 day window your score will not be further affected but on the 31st day it would.
Andrew Roach
Mortgage Agent
Neighbourhood Dominion Lending Centres (#11764)
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enter wrote:
Jan 15th, 2013 2:18 am
just curious what is a mortgage pre approval? In the past before I bought my first home I went into my bank a few months prior to inquiry about this...they mention they can't really pre-approve a mortgage if there is property i have offered to purchase. How do they qualify you for a mortgage without knowing anything about a property?
A pre-approval is pointless if you've already made an offer to purchase a property. A pre-approval is meant to give you and the bank an idea of how much you can afford to spend, using your income and credit information etc... without doing a full application. You've skipped that process by making an offer on a property. You need to now full app for the funds.
Can you believe it? They sent my income tax return forms back to me! In response to question # 4, "Do you have any dependants?" I replied - "2.1 million illegal immigrants, 1.1 million crack heads, 4.4 million unemployable people, 901 thousand people in over 85 prisons, and 650 idiots in Parliament.
Apparently, this was NOT an acceptable answer.

Who the hell did I miss? :razz:
Member
Dec 22, 2012
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wayne74 wrote:
Jan 15th, 2013 9:51 am
That's gotta be one of the funniest things I've ever heard :facepalm:
That's right up there with someone's belief that Equifax owns Transunion :facepalm:

The fact is, your credit file is updated as Equifax and Transunion receives the information from creditors, normally on a monthly cycle. If you have lots of accounts, your credit file can be updated several times each month, as lenders report at different times throughout the month.
And for your information, inquiries are placed on your credit file immediately once your credit has been pulled by the lender.
Thanks for the good laugh though, you made a grumpy Tuesday guy chuckle!
sorry but it actually does... ex i did a credit application last week, and the equifax report date was nov 15th. therefore while equifax im sure updates more often, the report that is sent out to your FI is only updated every 3 months

edit: might i also add, i do have 2 different credit cards that i use every month
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xhalo21 wrote:
Jan 15th, 2013 11:34 am
sorry but it actually does... ex i did a credit application last week, and the equifax report date was nov 15th.
I don't understand what you are saying here. You did a credit app? You applied for something? And a lender told you the file date was Nov 15?
xhalo21 wrote:
Jan 15th, 2013 11:34 am
stherefore while equifax im sure updates more often, the report that is sent out to your FI is only updated every 3 months
Lenders see exactly what is in your credit file the exact moment they obtain it. And it's updated as new information is provided, which is several times per month. There's no way a lender pulled a credit file on you with a date of Nov 15th. You're definitely mistaken or misunderstood.
Can you believe it? They sent my income tax return forms back to me! In response to question # 4, "Do you have any dependants?" I replied - "2.1 million illegal immigrants, 1.1 million crack heads, 4.4 million unemployable people, 901 thousand people in over 85 prisons, and 650 idiots in Parliament.
Apparently, this was NOT an acceptable answer.

Who the hell did I miss? :razz:
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Dec 22, 2012
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wayne74 wrote:
Jan 15th, 2013 2:29 pm
I don't understand what you are saying here. You did a credit app? You applied for something? And a lender told you the file date was Nov 15?



Lenders see exactly what is in your credit file the exact moment they obtain it. And it's updated as new information is provided, which is several times per month. There's no way a lender pulled a credit file on you with a date of Nov 15th. You're definitely mistaken or misunderstood.
I saw the report that the FI pulled up (turned the screen in my direction) i applied january 7th, i havent done any kind of credit application in over a year therefore its not like they reused it. i actually asked them about it "why does it say report date nov. 15th?" "equifax updates the report that we get every three months, so your credit limits/balances owed may not be up to date"

If i am incorrect please let me know how
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xhalo21 wrote:
Jan 15th, 2013 6:45 pm
I saw the report that the FI pulled up (turned the screen in my direction) i applied january 7th, i havent done any kind of credit application in over a year therefore its not like they reused it. i actually asked them about it "why does it say report date nov. 15th?" "equifax updates the report that we get every three months, so your credit limits/balances owed may not be up to date"

If i am incorrect please let me know how
I'm not saying you're incorrect, but none of this makes sense. When you apply for credit, the decision is made using your current credit situation, not info that's months old. If this were the case, one could run up all their lines, and head straight to the bank to get more credit to max out and be in over their head before anyone knew what hit them. If your banker fed you that line, tell them next time to put the glass pipe away.

I'm still lol'ing on this one :lol:
Can you believe it? They sent my income tax return forms back to me! In response to question # 4, "Do you have any dependants?" I replied - "2.1 million illegal immigrants, 1.1 million crack heads, 4.4 million unemployable people, 901 thousand people in over 85 prisons, and 650 idiots in Parliament.
Apparently, this was NOT an acceptable answer.

Who the hell did I miss? :razz:
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Apr 16, 2007
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xhalo21 wrote:
Jan 15th, 2013 6:45 pm
I saw the report that the FI pulled up (turned the screen in my direction) i applied january 7th, i havent done any kind of credit application in over a year therefore its not like they reused it. i actually asked them about it "why does it say report date nov. 15th?" "equifax updates the report that we get every three months, so your credit limits/balances owed may not be up to date"

If i am incorrect please let me know how
You are semi-right.
First of all.. there are 2 bureaus(retail and member) involved in this conversation. Yes there is such a thing as a 3 month update process but that is mainly the consumer bureau you purchase from Equifax. If you subscribe to any Equifax scoring products then I think your updates will be monthly and you will see the reporting changes made by all creditors monthly.
ie: if you have an LOC and are paying it down you will see balance reports from the creditor month by month in real time.
But if you buy your Credit Bureau once or apply for the free version then any and all payment updates may not reflect real time updates for 3 months.

All financial institutions who are EQ and TU members see bureau reports in real time as they are pulled. There is no such 3 month cushion of reported data on the bureau member portal. I can only presume the person you are speaking with at your financial institution is not properly trained.
The simple fact that you state he/she turned around their monitor to show you what they see also tells me they are not properly trained as doing so is a big no no.
No screens, no printed matter, no internal scores or actual bureau scores, nothing should be shown to clients in regards to credit bureau data and/or status.
This is not to say what you saw (Nov 15th) is wrong but I'm confused at most as to why and how this financial institution pulls consumer bureaus?

I can only now ask who is this financial institution??
If its not a main FI I presume they may be a small time funder(sub-prime perhaps?) marketing financial services without bureau member eport access and their only way to sell financial products is by way of pulling the consumer bureaus.


** add, ok had a phone call with a good friend in same industry who advised me some mortgage brokers act as credit bureau agents and do not have full bureau access and can only pull consumer-like bureaus.
Bureau access is based on a tiered cost basis. Small funders/agents who don't pull xx number of bureaus per month don't get full access etc.

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