Will mortgage pre-approvals affect my credit score?

Yes, mortgage pre-approvals can affect your credit score if you obtain more than three pre-approvals. Because each approval requires the lender to pull your credit rating, it will look like you are suddenly applying for a lot of credit and subsequently reduce your score. However, credit rating agencies recognize that the pre-approval process means you may apply to more than one, so more than three appears to be the number that triggers a rat-ing issue. You can get around this by starting with a mortgage comparison tool and choos-ing the best three options it provides to request formal pre-approvals from.

For how long is my a mortgage pre-approval valid?

The length of time a mortgage pre-approval is valid differs depending on the lender and the borrower’s specific circumstances. Most are valid for 90 to 120 days. There are very few that are valid beyond 120 days. If the rates lower during the period of your mortgage pre-approval, you will still be eligible for a lower rate. However, keep in mind that these rates can be affected if your credit score or financial circumstances change. Always protect yourself with a financing clause.

I have a mortgage pre-qualification. Do I still need a mortgage pre-approval?

Mortgage pre-qualification and mortgage pre-approval are very different financial as-sessments. Most mortgage pre-qualifications rely on your estimates of your finances ra-ther than the hard documentation and credit scores required by a mortgage pre-approval. Think of a pre-qualification as a first step in the process. It will give you a good idea of how much house you can afford, your monthly mortgage payments and how much you will need to provide for your down payment and taxes. However, it does not guarantee rates or terms in the same way that a pre-approval does.

Jennifer Crump

Jennifer is a freelance writer whose work has appeared in Profit, The Financial Post, Yahoo Finance, Moneywise, MSN Money and Your Office among others. In her spare time, she travels and talks a lot about taking up golf.