Mortgage Pre-Approval Without Hard Inquiry
What is a Mortgage Pre-Approval?
A mortgage pre-approval is an assessment of a borrower’s creditworthiness, income, and assets to determine the maximum loan amount a borrower can qualify for. Mortgage lenders review a borrower’s credit history, income, assets, and other financial information to determine the amount of risk they are willing to accept and the loan amount they are willing to approve.
Soft vs Hard Credit Inquiries
When it comes to mortgage pre-approval, there are two types of credit inquiries that lenders may perform: a soft inquiry and a hard inquiry. A soft inquiry is a check of a borrower’s credit that does not affect the borrower’s credit score. A hard inquiry, on the other hand, is a check of a borrower’s credit that does affect the borrower’s credit score.
Can You Get Pre-Approved Without a Hard Inquiry?
Yes, it is possible to get pre-approved for a mortgage without a hard inquiry. Some lenders may offer a mortgage pre-approval without a hard inquiry, while other lenders may require a hard inquiry to determine the borrower’s creditworthiness. Borrowers should ask lenders what type of credit inquiry will be performed before submitting an application.
Benefits of Pre-Approval Without Hard Inquiry
Getting pre-approved for a mortgage without a hard inquiry can help borrowers maintain their credit score and avoid any potential impact a hard inquiry may have on their credit. It can also help borrowers save time, as the pre-approval process may be faster without a hard inquiry. Additionally, getting pre-approved without a hard inquiry can help borrowers understand the maximum loan amount they may qualify for, allowing them to shop for homes within their budget. Pre-approval without a hard inquiry can be a great way for borrowers to get an understanding of their mortgage options without negatively impacting their credit. However, lenders may still require a hard inquiry when the borrower submits a formal application for a loan. Borrowers should ask their lender what type of credit inquiry will be required before finalizing their loan application.