Good advice to buyers is to do nothing that can affect your credit report until the loan closes. Opening new credit cards, taking on new debt for a car or furniture or changing jobs could affect the lender’s decision if they believe you may no longer be able to repay the loan.
The benefits of buyer’s pre-approval are definitive: it saves time, money and removes the uncertainty of knowing whether the buyer is qualified. The direct benefits include:
- Amount the buyer can borrow - decreases as interest rates rise
- Looking at “Right” homes - price, size, amenities, location
- Find the best loan - rate, term, type
- Uncover credit issues early - time to cure possible problems
- Bargaining power - price, terms, & timing
- Close quicker - verification have been made
It is a very common practice for mortgage lenders to require income and bank verification and to re-run the borrowers’ credit one final time just prior to closing. Mortgage approval isn’t final until it’s funded.