So I got pre-approval from loans.com.au around 3 months ago, but haven't bought a home yet. We may well buy on the weekend, and I've found a slightly lower rate on offer from ING (we'll be a few hundred a year better off).
If I go with ING post purchase, having already had pre-approval elsewhere, will my credit rating be affected negatively? I've read elsewhere getting more than one pre-approval is a bad move?
Anyone have an opinion?
Cheers.
That is incorrect
Having another lender do a pre approval will be another hit on your credit file.
Unfortunately this is not true. Making multiple credit enquiries with lenders will definitely have a downward influence on one's credit score. It is one of the main reasons people use brokers: A good broker should have at least 60 lenders on their lender panel and can give you multiple comparisons and assessments of your likelihood of formal approval without damaging your credit score. They are also obligated to tell you who they can and can't provide you advice and comparisons on. Hope this helps.
Right, I thought a pre approval involved a hard enquiry on your credit file?
Is anyone else able to comment here? Would a lender view the fact that I have a recent pre-approval from another lender negatively? Would it affect the loan and / or willingness to lend?
Mortgage Broker here.
Yes if you do a pre-approval with another lender another record will be recorded on your credit file.
However most mortgage broker while submitting your loan will also submit what we call a broker notes, these explain why the record was on your credit file.
EG. One client came to me after talking to NAB a couple of time during the course of the year, when we look at her credit file, NAB did put 3 credit inquiries on it even though she never gets the approval. We just had to explain to her new lender (ING) in that case what those were.
Doing another pre approval will mean there is a new enquiry on your credit file.
Speak to a good mortgage broker. Not necessarily one that will refund commission, but one that has the experience and knowledge to put you in the right product.
Sounds like you're shopping around for the best deal before you make your move - seems wise to me.
Short story: I was with Westpac from an early age. When the time came to buy a HOUSE, I took a dumby run with another bank who gave me a pre-approval for $x.
So I thought that with my history with Westpac, I'd do even better. Westpac manager turned me down and suggested I look at buying an APARTMENT.
I went straight from his office to the teller, withdrew all my money (deposit) and walked across the road to the dumby bank and have been there ever since.
As mentioned by @tomleonhart, a good broker will be able to make notes that clearly rationalise why you have other credit enquiries on your file, it does not necessarily mean your loan will be declined elsewhere.
Having a pre approval letter is a smart move and will often be the essential bargaining chip when a real estate agent is presenting offers to the sellers.
Once your offer is accepted, you are able to obtain formal finance approval from a lender of your choice, you are not locked in to whoever provided the pre approval.In my opinion extra pre approval letters are not necessary and will result in further explaining when you do make the final lender decision.
Best of luck :)
NB: Perth based mortgage broker here
There is a difference between Inquiries and File access (the way lender's view it). If it was not a fully assessed pre-approval it probably is just a file access (known as indicative pre-approval).
You can contact VEDA for your credit file. If you want it instantly I can email you your copy without any charge in a few minutes (I'm a broker registered with VEDA). I will need you to fill out a credit check and 3rd party disclosure form.
Any half decent broker would just explain it and it would not be an issue at all. It only becomes an issue when you apply for many different loans within one month for example.
Up to you if you want to try ING but no, getting another pre-approval will not affect credit rating.