On The Money

You’ve Applied For Too Many Home Loans, What Now?

Home LoanSo you’ve decided to purchase a house. Before even beginning the search for your dream home, you’ll have to apply for a home loan to support the expense. While getting pre-approved for a home loan offline can look like a complex process for first timers as you need to provide heaps of documents related to your taxes and income, it doesn’t have to be.

Many lenders offer home loans at great rates, which could make it difficult to determine which lenders would approve your application. The typical approach is to apply to multiple lenders. But though several applications can increase your available options, it can also adversely affect you.

Affects Credit Score

When you submit a loan application, the lender will ask the credit bureau for a copy of your credit report. If you apply for loans to too many lenders, the high number of credit score inquiries may decrease your credit score. Too many deductions can push your credit score below the desirable lenders threshold and may leave you ineligible to pursue better loan products.

Unwanted Logistical Hassles

It’s difficult enough to apply for one offline home loan. Reproducing the same documents with multiple lenders can result in the undesirable logistical hassle of gathering, preparing, and submitting documents. As most of the application processes are time-sensitive, it is sensible to minimize the number of applications you send out.

Monetary Losses

Not all home loan applications are free. Some require you to shell out a processing fee (non-refundable in most cases) to handle your paperwork during the application process. Thus, the more applications you submit, the more you’ll pay.

To save yourself from the logistical hassles, expenses, and credit score reductions, it is ideal to apply for a home loan no more than two banks at a time. You may apply further after receiving the outcome of those applications. Utilize basic resources and tools like calculators, product brochures, and loan checklists to help you obtain that great loan deal as well.