We strive to give you the best personal finance information possible for the entire UK marketplace, and that doesn’t always come easily. Sometimes we’ll recommend that you do something, only to find that there are hidden dangers that you need to be aware of. This is one of those times.
You see, applying online for some mortgage quotes is a good thing. It lets you know where you stand, because then you can follow up with the lender that ultimately speaks to you. Taking the time to research your lender is very important. However, did you know that you could risk your credit score by applying for too many quotes? Let us explain here in detail.
The problem isn’t the quote — it’s the information asked for. We’ve all seen those long forms online that beg to be filled out, and lenders will be able to give you a better decision right then and there. The truth is that they are pulling your credit report in order to give you that detailed information. This is something that should be helpful, except it’s really not — lenders feel that you might not be a good credit risk if you have too many inquiries in a short window of time. Their assumption is that if the competition didn’t want you, then there might be something wrong that they would be better off rejecting you from the beginning. Lenders tend to be a pretty conservative sort, and they don’t want to take a risk that you’re going to be a bad credit risk who defaults on them later on.
The truth is that if you’re dreaming about owning your own home, chances are good that you can’t imagine just walking away from it. But lenders assume that they know everything. The only way to win the mortgage game is to make sure that you’re giving only a mild bit of information at the jump. You don’t want to have them pull your credit report. And if you’re in doubt, make sure that you ask. They have to let you know if they’re going to pull your credit report. Some will try to avoid the question…let those go immediately. If they can’t be honest up front, then they have no business doing business with you. Go with lenders that are as transparent as possible.
The Internet is still a great place for mortgages, but you have to realize that the competition for mortgages is pretty fierce. Even though lenders may downplay it, the reality is that they need a constant supply of fresh prospects to sell mortgages to. They just can’t admit how much they need you. Don’t buy into their game — research and then plan a course of action that benefits you. After all, the mortgage lender isn’t going to be thinking about your interests first. Good luck!