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Even the smallest difference in your interest rate can save you money over time, so it pays to shop around for competitive mortgage rates from different lenders.
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However, each lender will perform an “extensive credit check” when you submit your application. A serious investigation can temporarily hurt your credit score by a few points. But the good news, according to Credit Karma, is that having a rate shopping strategy will not only help you save money in the long run, but also avoid having multiple inquiries on your credit report.
When shopping for a mortgage, serious inquiries are usually counted as an inquiry over a period of time. This can vary depending on the credit score model used, but Equifax says it’s usually 14 to 45 days. Although all inquiries appear on your credit report, only one will impact your score.
Even if a lender checks your credit report outside of this mortgage credit check window, shopping around is usually worth it, Consumer Finance reported. The overall impact of an additional survey is small compared to the amount of money you could potentially save over time.
Credit Karma also noted that if you’re planning on getting a mortgage soon, avoid applying for other types of loans at the same time. These will appear on your credit report as separate applications, even if you apply within the same timeframe. This could affect the interest rate you qualify for or even your ability to get pre-approved for a mortgage.
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