Beyond Real Estate - Hudson MA Real Estate, Marlborough MA Real Estate, Berlin MA Real Estate


Preparing to buy a home is a long and stressful process for many. You’ve spent months, or even years, saving for a down payment, planning your future, and building your credit to ensure you get the best possible interest rate on your loan.

Then you find out, when getting preapproved for a mortgage, that your credit score dropped by a few points. So, what gives?

There’s a lot to understand about how credit scores affect mortgages and vice versa. In today’s post, I’m going to attempt to cover everything you need to know about how applying for a mortgage can affect your credit score so you’ll be prepared when it comes time to buy a home.

Prequalification, preapproval, and credit checks

There are a lot of misconceptions about what it means to be preapproved or prequalified for a loan. Some of it is due to the jargon that is used in real estate transactions, and some of it is just a marketing technique on the part of lenders.

So, what does it mean to be prequalified and preapproved?

The short version is that getting prequalified is a quick and easy process to determine whether you’re eligible to lend to and how much you’re likely to receive. It involves a quick review of your finances, and often includes either a self-reported or soft credit inquiry.

A “soft inquiry” is the type of credit check that employers typically use for a background check. It doesn’t affect your credit score, as you are not applying to open a new line of credit. In fact, many lenders’ process for prequalification is a simple online form that doesn’t even require a credit check. We’ll talk more about the difference between soft inquiries and hard inquiries later.

The simplicity of prequalification makes it a simple and easy way to get started. But, it isn’t always accurate in how well it predicts the type of mortgage and loan amount you can receive. That’s where preapproval comes in.

When you get preapproved for a loan you fill out an official application (you often have to pay for these). This will request documentation for your finances and assets, and will ask your approval to run a detailed credit report.


These credit reports are considered “hard inquiries” and are a vital step in getting approved or preapproved for a mortgage. However, they also, at least temporarily, lower your credit score.

Why hard inquiries lower your credit score

When any creditor, be it a bank or credit card company, is determining whether to lend to you, they want to know that you are a safe investment. To determine this, they want to know how frequently you pay your bills on time, how much you owe to other creditors, and how financially stable you are right now.

When you make multiple inquiries in a short period of time, it’s a red flag to lenders that you might be in trouble financially. Thus, hard inquiries will lower your credit score for 1 to 2 months.

Applying to multiple lenders: the silver lining

When borrowers apply for a mortgage, they often shop around and apply to multiple lenders. While it may seem that all of these hard inquiries will add up and drastically lower their credit score, this isn’t the case.

Credit bureaus take into account the source of the inquiries. If they realize that you are applying for mortgages, they will typically recognize this as rate shopping and group these applications together on your credit report, counting them only as a single inquiry. This means your score shouldn’t drop multiple times for multiple mortgage preapprovals that were made within a small time frame.

Now that you know more about how mortgage applications affect your credit score, you can confidently shop around for the best mortgage for you and your family.


This Single-Family in Leominster, MA recently sold for $264,900. This Colonial style home was sold by - Beyond Real Estate.


27 Beth Ave, Leominster, MA 01453

Single-Family

$268,500
Price
$264,900
Sale Price

9
Rooms
4
Beds
2
Baths
South Leominster! Right on RT 12 not far from the Sterling line and close to I 190 and RT 2. Set back off the road in a comfortable setting on a nice lot, you will love the charm and character of this special property. Enormous family room surrounded by windows opens to the eat-in kitchen and dining room. First floor Master suite with a cozy fireplace and full bath could easily be used as space for your extended family. Second level has recently been painted and carpeted. This property is located in Business B district. Central AC for the Summer months, plenty of storage and more.

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This Single-Family in Berlin, MA recently sold for $630,000. This Colonial style home was sold by - Beyond Real Estate.


43 Crosby Road, Berlin, MA 01503

Single-Family

$600,000
Price
$630,000
Sale Price

14
Rooms
4
Beds
2/1
Full/Half Baths
This beauty is grand right from the stone walls, long sweeping driveway, and commanding presence on the gorgeous private, yet not secluded lot. Just inside the foyer there is a lovely "prom staircase" that wows. Crown molding, beautiful trim and details really just add special to every single room. Check out the floor plan. You aren't likely to outgrow this home anytime soon. Cherry Kitchen, loads of natural light, hardwood floors, formal & casual living areas and storage galore, even an unfinished walk up attic all check off your Must Have List. Each bedroom, each room is well planned and easy to re-purpose as life cycles adjust. You must truly walk through to appreciate all this stunning home has to offer. Take your time and know that strolling through the wooded acreage abutting conservation land is a wonderful choice to while away an afternoon, if you make it past the perfect spot to hang a hammock.




One of the perks of moving out of an apartment into a home is having your very own outdoor space. Depending on how close to the city you live, you may not get much of a yard with your home. If you’re looking for that perfect outdoor space to dwell in, read on for some tips on buying a house with a yard. If you check the yard out, you could save yourself from facing problems further down the road. 


Are The Trees In Good Condition?


While mature trees in a yard are a sure fire way to have privacy and shade, the trees must be safe. You want any trees in your yard to be healthy. Otherwise, during a storm, you may have an issue with falling trees. If you have a lot of trees in your yard, it may be a good idea to hire an arborist who can tell you if the trees are safe. Tree removal can be costly, so you’ll need to plan for this expense if your yard has many trees.


How Safe The Outdoor Living Areas?


You should check out any outdoor living areas the yard has. If the home comes with a patio, or gazebo the soundness of the structures should be checked. Any cement should be free of cracks or crumble.


The Layout Of The Lot


There is more to a yard than the size of a property. You should keep in mind where the home is situated on the lot. Is the front yard more prominent than the backyard? Is the home on a slope? Is there a chance water will pool near the foundation of the house? All of these questions are important for the long-term health of the property. 


How Much Yard Are You Willing To Care For?


You need to know how large of a yard you’re actually willing to care for. For many buyers, a small yard is just enough. Other buyers aim to care for a large lawn the many flowerbeds. The larger the yard, the more possibilities you have. If you are willing to take the extra time and incur the additional expense that a large yard will cost, it could be a good feature to look for. Yard size may also narrow down your home search considerably. 


Buying a home with a yard can be a great decision, all you need is to understand your own preferences and ability to care for properties of different sizes.        



This Condo in Northborough, MA recently sold for $400,000. This Townhouse,Half-Duplex style home was sold by - Beyond Real Estate.


11 Chapin, Northborough, MA 01532

Condo

$399,900
Price
$400,000
Sale Price

6
Rooms
2
Beds
2/1
Full/Half Baths
You will be BEYOND impressed & bring your white gloves to this spectacular property! This home offers SMART(lights,switches, thermostats etc.) technology as well as audio/visual wiring throughout. A unique opportunity to live in a single family attached home with no maintenance fees and is ideal for the busy professional as well as a family! The lower level has set the stage for a fun home theater living space w/ gas fireplace that turns up the ambiance! (other option is home office/guest suite) The main floor boasts fully updated kitchen, granite and sparkling back splash! Sit by the fire in the spacious living room, adjacent to sliding doors which lead out to beautiful stone patio!! On the upper level you will find 2 immaculate bedrooms, each with their own full baths. This property has so much to offer! The garage, ample parking and fantastic yard for entertaining are an added bonus!