Does Mortgage Pre-Approval Affect My Credit Score?

If you’re looking to get pre-approved for a home loan, you may be wondering does mortgage pre-approval affect my credit score? 

The simple answer: not necessarily. In some cases, a “soft inquiry” is made simply to review your credit score, and this doesn’t impact your score at all. In other cases, a “hard inquiry” is made into your credit history. And while this can temporarily drop your number by a few points, it’s not enough to make a material difference to your credit score.

As you might guess, there’s a lot of work going on behind the scenes to get you pre-approved for a mortgage. The mortgage experts at OVM are here to explain how mortgage pre-approval affects your credit score and how your credit score affects your mortgage pre-approval.

Does Mortgage Pre-Approval Affect My Credit Score?

Pre-Approval is the first step in the mortgage loan process. Pre-approval is having a lender review your finances and credit to determine how much money you qualify to borrow for your home purchase. It’s wise to get pre-approved even before you start your house hunt. This is because:

1. You won’t waste time looking in a price range you can’t afford, and
2. When you’re ready to make an offer, you’ll have a pre-approval letter to confirm that you can qualify for a home loan. This makes your offer more appealing to sellers because they get extra assurance that you’ll be able to secure the financing to complete the purchase.

Hard inquiries into your credit for the purpose of issuing a pre-approval may temporarily have a minute impact on your credit score. But getting pre-approved is absolutely essential to confirm that you can afford to buy the kind of house you want and to strengthen your offer when you find the right home.

Does My Credit Score Affect My Pre-Approval?

So we know that getting pre-approved for a home loan can have a small impact on your credit score. But, on the flip-side, does credit score affect pre-approval?

Absolutely! Your credit score is one of the main factors in securing a pre-approval and, ultimately, a mortgage loan.

Most lenders like to see a credit score of around 640 (although there are special programs, like FHA loans, available for homebuyers with lower credit). The higher your credit score is, the lower your mortgage interest rate can be. And the lower your mortgage interest rate is, the lower your monthly payment is, and the less you’ll spend on interest expenses over the loan term.

How to Get Pre-Approved for a Home Loan

Are you ready to learn how to get pre-approved for a home loan? The process is actually quite simple. Here’s a step-by-step breakdown:

• Step 1: Apply for a pre-approval. You can apply online in minutes with OVM by visiting www.ovmfinancial.com/QuickStart.
• Step 2: Approve a credit check. This will authorize your lender to pull your credit report.
• Step 3: Provide your financial documents. You’ll typically need:
  • Proof of income (like pay stubs, tax returns, W-2s, or bank statements)
  • Proof of assets (like account statements, deeds, or other certifications of ownership)
  • A list of debts (including the monthly payments and total balances)

With this information, our team will immediately get to work to provide you with a pre-approval letter as quickly as possible.

Do You Have Pre-Approval Questions?

As an OVM customer, you have a direct line to mortgage experts who can walk you through the pre-approval process. Call us at 757-296-2148. And if you’re ready to get pre-approved now, start your application online at www.ovmfinancial.com/QuickStart.