How many lender quotes to get?

Question

Hey guys,
I am considering a duplex in Texas and currently have one pre-qualification letter for a conventional loan with 25% down from one lender recommended by realtor.
I am not too happy with a 4.25% rate and points (esp. if we have to put down 25% and not 20%). I WANT to check with 4 other lenders for a better rate within the next 4 days.
Would this HURT MY CREDIT???
Thx,
Edita

Kyle J. · Answer

If you do all your rate shopping within a short period of time (i.e. 30 days or less), it typically won't hurt your credit anymore than a single inquiry.

Here's some more info for you:

http://www.myfico.com/crediteducation/creditinquiries.aspx

Arjun K. · Answer

Rates floored at end of September, and have been rallying since with the 30YR treasury.  Rates still much lower than 30YR thanks to the Fed (thank you fed!).  Without points, I'm about 3.95% today (this is not a firm quote, but roughly where I think I am at)) for 20% down single family and 25% for duplex, no points.  Local brokers however, would quote me wider by 0.125% - .25%.

This is all 30YR fixed quote.

Dawn Anastasi · Answer

Well both of these examples were in 2011 -- one was June 2011 and one was December 2011.  But I go on their site right now and a 10-year for an investment property does show 3.75% with no points. There are other rates with no points too.  But this could also depend on the area -- I'm in WI.

Paul Cordero · Answer

When was this?  Rates have most likely gone up.  They have been steadily increasing over the past few weeks.

Arjun K. · Answer

I've used Matt Popko at Guaranteed Rate to rush close twice.. once within 27 days, and most recently ont rack to close within 21 days.  That said if this is a funky transaction that won't appraise etc., you may be better off paying for "service" of a local lender (although I find that service often to be overrated...).  For a conventional close I would just ask Matt if he can make your timeframe or not.

Mike Murray · Answer

Hi Edita,
Kyle was correct when he said your credit stands for as least 30 days. When you go to the FICO sites opt-out when it asks about your information or you will receive offers from other mortgage people that buy this information from all 3 credit agencies. Important to look at all fees and ask about the turn around time. Fees are how low rates become equal to not so low rates.

Edita D. · Answer

I think my closing cost estimate from 1st lender were WAAAAY to high... 6700$ on a property with a purchase price of 110000!
The lender was referred to me by this new realtor...
2nd quote is 6000$, and 3rd is 4600$. A lot better!

So I got 3 quotes so far, ALL from realtor referrals. I feel like trying an aimloan and guaranteedrate.com as well, just to make sure to compare the rates. I am concerned with not being able to close on time though...

Arjun K. · Answer

I used guaranteedrate.com (Matt Popko) for 5 loans in Texas in recent months.  They will only give 25% down on duplex and 20% down on Single Family, which I believe is standard for the 4 lenders i spoke to.  Their rates and closing costs were better than the other 3 I spoke to who were local broekrs.

One thing to be aware of is that rates move.  Graph the Fannie Mae 30YR for the benchmark.  Rates have moved a lot in the past 4 months off their lows.  I think my bottom-tick was 3.625% no points and that is now closer to 3.9-4.0% today.

Dawn Anastasi · Answer

That's not necessarily true. I got 3.625% on one investment property (a duplex) and 3.5% on another (SFH) with just 20% down through aimloan.com.  There were no points.

Paul Cordero · Answer

To give you some perspective, you aren't going to get much better on the rate for an investment property, maybe 4.125% with no points.  You could pay discount points (2 will get you into the high 3s, but does it make sense for your goals on the property)

Also, 25% down is pretty standard for an investment property.

Connect with me if you would like to get a 2nd look without pulling credit.

How many lender quotes to get?

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