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Will Multiple Mortgage Applications Hurt Your Credit Score?

June 3, 2025 by Kay Monigold

When you are ready to buy a home, it is natural to shop around for the best mortgage rate and terms. But you may have heard that submitting multiple loan applications can damage your credit score and throw a wrench in your homebuying plans. Here is the truth behind hard inquiries, rate shopping, and how to protect your credit while securing the best deal.

Understanding Hard Inquiries vs. Soft Inquiries
Whenever a lender runs your credit, whether for a credit card, auto loan, or mortgage, they generate a hard inquiry on your report. Hard inquiries can lower your score by a few points and typically stay on your report for up to 12 months, but they fade after about two years. Alternatively, if you check your own credit or prequalify through some websites that promote no affect to your credit score, it will generate a soft inquiry and will not affect your score.

Rate Shopping Grace Periods
Credit scoring models from FICO and VantageScore recognize that savvy borrowers comparison-shop for the same type of loan. To prevent penalizing you for smart shopping, they group multiple mortgage (and auto) inquiries within a short window, usually 14 to 45 days, and will count them as a single inquiry. This means you can apply to several lenders within a couple of weeks without a significant hit.

  • FICO: 14-day window for newer models; 45 days for older versions.
  • VantageScore: 14-day window across all versions.

How Much Will Your Score Drop?
You can expect a single hard inquiry to typically cost you 5–10 points on a FICO score. If you keep all your mortgage applications within the allowed window, they will count as one inquiry and only incur that initial drop. If you miss the 14-day window applying for several loans over a 2-month period, you can expect it to trigger multiple inquiry hits, intensifying the effect.

Keep in mind that there are other factors that will play into this like credit utilization, payment history, length of credit history, and more that will carry more weight than a handful of inquiries. If your overall credit profile is strong, a temporary 5–10 point drop will not usually affect the outcome of the loan.

Best Practices for Mortgage Shoppers

  1. PreQualify First: Work with a mortgage professional that uses soft pull prequalification tools to see your likely rates without affecting your score.
  2. Apply Quickly: Have a plan in place to aggressively shop within a two-week span to bundle inquiries into one.
  3. Check Your Credit: Review your credit report before applying to correct any errors (e.g., misreported late payments, incorrect balances, accounts that you do not recognize, etc.).
  4. Mind Your Other Credit: Avoid opening new credit cards or taking out auto loans during this window; they generate hard pulls too. It’s best to refrain from any purchases during the approval process.
  5. Lock in Your Rate: Once you find a competitive offer, lock your rate to avoid having to re-apply and ensure your hard inquiry clock stops.

Multiple mortgage applications will hurt your credit if they are spread out over too long a period. By focusing your shopping within the 14-day window, you will only face a single, minor score dip. Pair smart timing with a strong credit profile, and you can secure the best mortgage deal without sacrificing your score.

Filed Under: Mortgage Tagged With: Credit Score, Home Buying, Mortgage Tips

How Much Down Payment Do You Need for a Mortgage When Buying a Home?

May 23, 2025 by Kay Monigold

If you’re considering buying a home, you’re likely wondering how much you’ll need for a down payment. The common belief is that you need to put down 20% of the home’s purchase price, but that’s not the only option and in many cases, it’s not even necessary.

Let’s break down what’s really required and explore your choices.

The Traditional 20% Rule
Traditionally, lenders prefer a 20% down payment. Why? Because it lowers their risk. If you’re purchasing a $200,500 home (the national median sales price), that is a down payment of $40,100. Understandably, many buyers, especially first-timer, struggle to save that much cash.

The good news is that a 20% down payment isn’t always required to qualify for a mortgage.

Low Down Payment Options
There are a number of loan programs that allow you to purchase a home with less than 20% down. For example:

  • FHA Loans typically require as little as 3.5% down.
  • Conventional Loans can offer down payments as low as 3%, depending on your credit score and financial profile.
  • VA Loans (for eligible veterans and military members) and USDA Loans (for certain rural areas) may require no down payment at all.

These programs are designed to make homeownership more accessible, especially for first-time buyers or those who qualify based on service or location.

The 80/20 Option
Another structure, though less common today, is the 80/20 loan. This involves taking out two mortgages: one for 80% of the home’s value, and a second, typically smaller loan for the remaining 20%. The benefit? No down payment is required upfront. However, the second loan usually comes with a higher interest rate, which can lead to higher monthly payments.

The 100% Financing Option
While 100% financing is harder to find due to tightened lending regulations, some lenders still offer it under specific conditions. These loans don’t require a down payment, but often come with:

  • Higher interest rates
  • Mandatory private mortgage insurance (PMI), which protects the lender
  • Stricter credit and income requirements

PMI is typically added to your monthly mortgage payment and continues until you’ve built at least 20% equity in the home.

The Trade-Off of No Down Payment Loans
While zero-down loans make it easier to buy a home sooner, they also come with trade-offs. You may qualify for a smaller loan amount, face higher monthly payments, and pay more in interest over time. In contrast, a larger down payment reduces your loan balance, improves your interest rate, and lowers your monthly payments.

If saving for a down payment feels overwhelming, don’t let that stop your homeownership goals. There are many programs available to help. Work with a loan officer who can help you explore the options that best match your financial situation and long-term goals.

Whether you’ve saved 3%, 10%, or the full 20%, there’s likely a mortgage option out there that fits your needs.

Filed Under: Mortgage Tips Tagged With: Down Payment Help, Home Buying Journey, Mortgage Tips

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Our Team

Kay MonigoldKay Monigold
Owner/Mortgage Broker/Residential Mortgage Loan Originator
NMLS#1086176

Steven LoweSteven P Lowe, Sr
Residential Mortgage Loan Originator
NMLS #1085638

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