How many mortgage preapprovals should you get?
Quick insights
- You can apply for preapproval with multiple mortgage lenders to compare rates and loan terms.
- Submitting applications within 14-15 days generally limits credit impact to a single inquiry.
- Most preapprovals are free, and receiving preapproval letters from multiple lenders can help you make a more informed decision.
When you’re getting ready to purchase a home, one of the smartest moves you can make is getting preapproved for a mortgage. But here’s something some homebuyers may not realize: Just like comparing quotes for a car or insurance policy, you can request mortgage preapprovals from multiple loan providers to explore all of your options.
It may be a good idea to compare at least 3-5 mortgage lenders so you can get a clear sense of loan terms, mortgage interest rates and the level of service each one offers. This extra step can help you make a more confident and informed decision.
Can you get preapproved from multiple lenders?
Yes, you can request mortgage preapproval from more than one loan provider. This can be a good idea for homebuyers because it allows you to compare different loan offers, interest rates, estimated monthly mortgage payments and lender fees. Each loan provider may review your financial profile slightly differently depending on their criteria, so applying with several of them can help you find the loan option that fits your needs.
Do multiple preapprovals affect my credit score?
Mortgage preapprovals typically require a hard credit inquiry, which will cause a small dip in your credit score. However, credit scoring models usually count multiple mortgage inquiries made within a limited time period as a single inquiry. This is designed to give borrowers the opportunity to shop for loan terms without negatively affecting their credit score more than once. The exact window may vary by credit scoring model but is usually between 14-45 days.
Does it cost money to get preapproved?
Most loan providers offer mortgage preapprovals at no cost to the borrower. In some cases, a mortgage lender may charge an upfront application or processing fee. These fees usually range from $300-$400 and are sometimes applied to your closing costs if you proceed with that loan provider. It may be a good idea to ask about fees before submitting your loan application to avoid surprises.
How to apply for mortgage preapproval with multiple lenders?
- Prepare your documents: Gather recent pay stubs, W-2s or tax returns, bank statements and proper identification. Most loan providers require similar documentation.
- Research your options: Look into at least 3-5 reputable lenders such as banks, credit unions and online lenders to compare services, rates and offerings.
- Apply within a short window: Submit all preapproval applications within a 14-15 day period. Credit scoring models typically count mortgage inquiries within this time frame as a single credit check.
- Track your applications: Stay organized by keeping notes or folders for each loan provider’s responses, contacts and required next steps.
- Compare loan estimates carefully: Review each mortgage lender’s offer for loan amount, estimated interest rate, fees and loan terms. This helps you identify which loan may support your budget and financial goals.
- Review your preapproval letter: Once received, double-check the loan amount, estimated rate, loan type and expiration date. Share the letter with your real estate agent and begin the house hunting process.
In summary
Getting preapproved by multiple loan providers can help you make a more informed decision about your mortgage. As long as you stay organized and apply within a short time frame, you can compare offers without significantly impacting your credit. Reviewing each preapproval carefully puts you in a stronger position when it’s time to make an offer on a home.
