Rate shopping: effect of credit inquiries

alexandicity

Hello all!

I've been reading here for months and learnt so much, but now I have some questions I can't find an answer to I'm about to buy and renovate a house so I'm sure you'll see a lot more of me, with questions and hopefully advice...

Today, my question is about mortgages. I am shopping around for them, as are two mortgage brokers. I don't particularly need them, but I thought's I'd indulge them and see if perhaps they found something better than I have! No harm in that, right?

Well maybe. They're getting to the point where they want to do credit checks. They tell me they can't do the soft checks, they have to do the hard ones which leave a negative footprint on the credit score. Being paranoid about maintaining the best possible score, I'm nervous about this, although he reassures me that I can have 3 or 4 checks in a month without it causing problems. Does that sound about right? Is it safe for me to get a three hard checks a month? How big an impact will having more than this be?

Thanks!

Dave_Ham

So after "indulging" these mortgage brokers, you now come on to check the validity of what they are saying..

Ok, looking over the patronising phrasing and hoping it is just worded poorly.

You do not want loads of rejections on your credit file and whilst 3-4 credit checks will not do any major harm, I would expect a decent broker to get it right first time or at least 2nd.

If you are buying as an investor (buy to let) it is likely they are hard searches, although there are residential lenders that undertake soft searches first at AIP stage.

If you are looking at buy to let lenders them some will only accept applications from brokers.

alexandicity

Apologies if it came across as patronising! I have had my fingers burnt with IFAs previously and am always a little suspicious as a result. These are the resident brokers at the real estate agents, and I'm not expecting them to beat the Mortgage in Principle I already have - the worry is more that they might invalidate it (as I understand that lenders do a second check when you decide to formally take the loan). However, they've been friendly and helpful so far, so if they can get a commission and I can get an equally-good-or-better mortgage deal, everyone wins

This is for a residential mortgage. During my own mortgage hunting, I found, as you say, that many lenders were happy to do soft searches - which were great. It seems strange that full checks are needed now, but that's what he's telling me..

Thanks for the info Is there a distinction between a rejection and an inquiry, when it comes to credit checks? Do they appear differently on the record?

harvey115

Estate Agent brokers are usually a NO-GO because they are mostly regarded as unprofessional and do not have much knowledge of the market.

I would suggest you get in touch with an independent broker, ask your friends and family for recommendations. You may also give L&C a call.

In terms of searches, it all depends ont he lender. Some would do a soft search as an enquiry during the AIP/DIP/MIP and then a full search on your full application.

I would suggesst that you get in touch with a reputable broker rather then the ones connected to estate agencies. No wonder why you do not feel comfortable with them, they are well known in the market to be waste of time and money. You need to stop relying on soft/hard credit checks, although they may not cause big issues they may well put off a good lender from approving you a mortgage.

Best of luck.

alexandicity

Thanks. This guys doesn't seem too bad but hasn't been able to find something better than what I have already. He is trying to imply that the vendor of the property is selling (at an admittedly very good rate) on the condition we take a mortgage from the real estate agent, which sounds very suspicious to me. However, the one he is suggesting is about the same as my existing mortgage offer, and I am very keen to move the deal forward...