Just Got Kicked In The Head (figuratively Speaking).......

FedUp02

LoanSafe Member
Apr 26, 2009
997
110
43
I am not sure if this is the right section to inquire, but, we have been looking for another place to rent or buy as our current landlord needs where we are back. We were recently surprised to found out that before we can even look at a house/apartment, we need to be pre-approved. We found a place we liked, and sent a request to see it. We were then literally bombarded with requests to fill out an application and provide an application fee, including all kinds of personal information, 2 years of tax returns. In other words, info you used to provide AFTER you saw the house and wanted it. We were informed that because of a new law (this year) you can't look at anything to buy or rent unless you are pre-approved. Never heard of this until now. This sounds like something that should be illegal.
Also, when my credit was checked, we were told that I might lose 2 or 3 points at the most and that I would get it them back shortly. I lost 11 points.
So, to wrap it up, why was this done so quietly? We have spoken to others who had no idea this happened.
Can anyone who has more knowledge about this educate us? Surely, something can be done about this?
Sounds like a lot more people might end up homeless.
Thank you!
 

wanda robo

LoanSafe Member
Sep 29, 2012
3,940
634
113
NJ
I am not sure if this is the right section to inquire, but, we have been looking for another place to rent or buy as our current landlord needs where we are back. We were recently surprised to found out that before we can even look at a house/apartment, we need to be pre-approved. We found a place we liked, and sent a request to see it. We were then literally bombarded with requests to fill out an application and provide an application fee, including all kinds of personal information, 2 years of tax returns. In other words, info you used to provide AFTER you saw the house and wanted it. We were informed that because of a new law (this year) you can't look at anything to buy or rent unless you are pre-approved. Never heard of this until now. This sounds like something that should be illegal.
Also, when my credit was checked, we were told that I might lose 2 or 3 points at the most and that I would get it them back shortly. I lost 11 points.
So, to wrap it up, why was this done so quietly? We have spoken to others who had no idea this happened.
Can anyone who has more knowledge about this educate us? Surely, something can be done about this?
Sounds like a lot more people might end up homeless.
Thank you!

Oh dear, the hits just keep on coming, huh? I'm sorry to hear you have to move again.

Don't let anyone else pull your credit, they're lying. You will take that 11 pt hit every time, unless you pay a big chunk to a creditor to raise your score while your score goes down for hard pulls.. Your score only changes every 30 days, so if the place you like falls through, go to Experian & pay the one time fee to pull your own credit & take it with you when you go shopping.
 

wanda robo

LoanSafe Member
Sep 29, 2012
3,940
634
113
NJ
Credit scores are affected by a number of factors:
Your high credit vs your balance
(Obviously) timely payments
Credit inquiries

For instance if you have a credit card with a high credit of $5000 & only owe $300 your score will go up.But the moment you make a $4000 purchase (bringing your balance to 4300 on a 5000 limit) your score goes down. Regardless of if you make timely payments. It takes time, to lower the balance , which makes your score go up.

Now we all know a payment that shows delinquent lowers our score.

If you're only making minimum payments (even if they are timely) & have high balances & have multiple inquiries your score will still go down with each inquiry.

Am I making sense?

(Dear Lord, I need a lawyer joke from you).
 

FedUp02

LoanSafe Member
Apr 26, 2009
997
110
43
Hi Wanda - Thanks for your response. Yes, you made total sense.
No, I am not surprised about the credit checks - Never surprised about anything to do with that. I have been informed that it does not need to be checked again (unless they change the rules on that too).
My main surprise is - and note that it happened quietly (others we have spoken with had no idea either) - having be pre-qualified (giving all of the 20+ items they need) BEFORE seeing a place for the first time. This is insane. Just my opinion.

Sorry I have no jokes right now, but, hope to have something soon. Actually, I could use some myself. Ha!
 

FedUp02

LoanSafe Member
Apr 26, 2009
997
110
43
Wanda - is Experian a more reliable source than TransUnion and Equifax? Just wondering why you have to pay for that one and not the others?
 

wanda robo

LoanSafe Member
Sep 29, 2012
3,940
634
113
NJ
I'm not sure about more reliable but Experian & Trans Union are more widely used than Equifax.
 

FedUp02

LoanSafe Member
Apr 26, 2009
997
110
43
All I can get when I check is Equifax and Trans Union. I guess you have to pay for a third source.
 

acesfull

LoanSafe Member
Nov 5, 2008
2,216
110
63
NEW JERSEY
Inform the realtor that you paying cash therefore no need for pre-approval.. Their silly games require us to give them a little "white lie"
Best of luck.

Regards
Nj-82 Months
Acesfull/HWP
 

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
Jan 14, 2011
2,100
181
63
San Diego, California
www.loansreduced.com
First and foremost I'm sorry that you're going through this. I would like to clarify a couple things:

1. You should not be paying an upfront fee to obtain a pre-approval, that is a way for a lender to "lock you in" to using them. If you decide to not use them you may be liable for that upfront fee.

2. When you get your credit pulled for a mortgage, it really shouldn't impact your score that much unless you have had a large amount of inquiries in the prior 6 months. If you haven't pulled your score in that long I would expect it to not impact it as heavily as 11 points. I know this is coming from another mortgage professional (me) but it seems like something is fishy. The other thing about credit inquiries is, if you get your credit pulled by multiple mortgage companies within a 15 day time period it should not impact your score as you're shopping for the loan. You want to work with the person/company you feel most comfortable with (with NO UPFRONT FEES).

My opinion is that you should get pre-approved prior to shopping for a home, there's no reason to go out looking at homes you may not be able to afford and that is what the Realtor is making sure of. I do have to say I'm not very fond of the majority of realtors and how they conduct their business but they may have been burned multiple times in the past with borrowers who aren't qualified and end up spending a great amount of time that leads to no results.

Here are the steps you should take:
1. Get pre-approved for the mortgage of your choice with flexibility on purchase price
2. Go home shopping and find the home you love
3. Make an offer on the property
4. Offer gets accepted
5. Now that you're already pre-approved it will make the mortgage process much smoother and can possibly close much earlier than if you didn't get pre-approved initially.

These are just my 2 cents on what you're dealing with, if you don't feel like your mortgage broker/agent is competent please feel free to reach out to us here at LoanSafe.org, I am the licensed mortgage expert on the forum that can originate loans in all 50 states. I'd be happy to be a non-biased 3rd party to your transaction and help guide you throughout the process. You can reach us on the 800-779-4547 anytime.
 

FedUp02

LoanSafe Member
Apr 26, 2009
997
110
43
Hi Erik,

Thank you for your response and information. We have been prequalified, but, have questions about some things that don't make sense to us. I don't have time right now, but, tomorrow I will be back to this and also want to address the credit issue.

Thank you also for your offer. That sounds good.

FedUp02
 

FedUp02

LoanSafe Member
Apr 26, 2009
997
110
43
Sorry Erik -looks like it will be more like Thursday. I will be out of town for the day tomorrow.

Thanks.
 

FedUp02

LoanSafe Member
Apr 26, 2009
997
110
43
2. When you get your credit pulled for a mortgage, it really shouldn't impact your score that much unless you have had a large amount of inquiries in the prior 6 months. If you haven't pulled your score in that long I would expect it to not impact it as heavily as 11 points. I know this is coming from another mortgage professional (me) but it seems like something is fishy. The other thing about credit inquiries is, if you get your credit pulled by multiple mortgage companies within a 15 day time period it should not impact your score as you're shopping for the loan. You want to work with the person/company you feel most comfortable with (with NO UPFRONT FEES).

Thanks for that information. Actually, the total numbers came to 11 points: 5 from TransUnion and 6 from Equifax. So, separately, I am not sure if that is still a lot or not. It is fishy isn't it?
 

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
Jan 14, 2011
2,100
181
63
San Diego, California
www.loansreduced.com
Ahah I think you must have clicked "Reply" on my post and that quoted my post. You can do that and then write beneath the quoted previous post or go to the bottom of the page and the "Post Reply" button will exclude the previous post.
 

FedUp02

LoanSafe Member
Apr 26, 2009
997
110
43
Well, yes, I did click "Reply" like I usually do, but, this is the first time that happened. Hmm, weird. Maybe it's a one time thing?

Anyway, I have another question for you. We took a chance and made an offer on a place (the sellers may not like it) and today our current real estate agent sent 9 documents for us to sign. We have purchased homes in the past and don't remember the endless amount of paperwork we have had thrown at us this time. I'm glad you supplied your number.

Thanks!