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Another top mortgage lender has suspended foreclosures amid “deficiencies” in its processes.

HSBC revealed in its Annual report that it was one of seven major banks under review by the Office of the Comptroller of the Currency (OCC) for mishandling of homeowner evictions.

“Following the examination, our examiners issued supervisory letters noting certain deficiencies in our processing, preparation and signing of affidavits and other documents supporting foreclosures, and in the governance of and resources devoted to our foreclosure processes, including the evaluation and monitoring of third party law firms retained to effect our foreclosures,” the company said in the report.

“Certain other processes were deemed adequate. Management is reviewing foreclosures where judgement has not yet been entered and will correct deficient documentation and re-file affidavits where necessary.”

Until then, foreclosures are on hold and the company is currently in talks with the Federal Reserve Board and the OCC regarding the terms of consent cease and desist orders.

The bank expects the consent orders to be finalized soon, but noted that the impact of the freeze has the potential to raise operational costs, while heightening “reputational” and legal risk.

HSBC may also be subject to fines and civil money penalties associated with the foreclosure missteps.

The company also revealed that mortgage lending in the U.S. fell by 17 percent to $51 billion last year, while mortgage lending in the UK increased seven percent to $104 billion.

Mortgage lending balances in HSBC Bank USA remained mainly unchanged at $16 billion, as the company continued to sell the majority of new loan originations on the secondary market.

As of December 31, 2010, approximately 32 percent of the HSBC Bank USA mortgage portfolio consisted of fixed mortgages and 77 percent were first lien (non-second mortgages).

HSBC shut both its HFC and Beneficial units back in 2009, resulting in thousands of layoffs.

Source: thetruthaboutmortgage.com

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Deciding whether to refinance your mortgage means considering your personal situation, the prevailing interest rate environment — and something that really hits close to home: closing costs.

What are refinance closing costs?

You may pay as much as 2%-6% of your outstanding principal in mortgage refinance fees, known as closing costs, though the total can vary by state and lender. It’s not a massive single charge, but a pile of small costs that quickly add up.

If you decide to lock in a new, lower mortgage rate, switch loan products or tap equity by refinancing, here are the closing costs to watch out for.

Early repayment fees

If refinancing will result in an early repayment fee from your mortgage lender, you may want to reconsider. Prepayment penalties aren’t very common and are usually applicable only within the first three to five years of a mortgage.

FHA and VA loans, and other mortgages backed by a federal agency, generally cannot include a prepayment penalty. And in some states, they are illegal. But it’s one thing you want to be aware of before beginning the refinance application process.

Discount points

Points are interest payments based on the total amount of your mortgage. You can prepay points to lower your mortgage loan’s long-term interest rate — these are called discount points. In other words, you pay now instead of later.

If you plan on staying in a home for a long time, paying for discount points to lower your mortgage rate may work to your advantage. Remember, when you buy points, it alters the break-even period for your refinance, so be sure to do the math.

Lenders can also charge points on a mortgage refinance simply to make more profit — without reducing the mortgage’s interest rate. If you see points on your Loan Estimate and didn’t buy discount points, you’ve got room to negotiate those fees.

Origination fees

The mounds of paperwork you’ll face when closing on your mortgage refinance come at a price. Lenders often charge origination fees to cover the cost of processing your loan and obtaining a credit report.

These origination fees, sometimes referred to as an administration fee, application fee, underwriting fee or document preparation fee, can increase your closing costs even further. The good news is that all origination fees are open to negotiation, so don’t be afraid to discuss them with your lender.

Appraisal and inspection fees

There is due diligence performed by the lender to ensure that your home is properly valued. You guessed it — you’ll pay for that, too.

Among the refinance closing costs, you may see a home appraisal fee, often between $300 and $500. If you bought your home recently and already have an appraisal on file, sometimes this service can be waived. However, if you suspect your home has gained value, you may want to have your home reappraised.

The mortgage lender may also require a termite and pest inspection, as well as a general review of the home’s condition by a property inspector or engineer. The charges for these services can be several hundred dollars as well.

Mortgage and title insurance fees

While you will already have homeowner’s insurance due to your existing mortgage, the refinance lender will likely confirm the coverage, protecting itself in the event the house is damaged or destroyed.

Mortgage loans backed by government agencies, such as the Federal Housing Administration (FHA) or the Department of Veterans Affairs (VA) require the payment of mortgage insurance — once again for the benefit of the lender.

If you have a conventional mortgage but put less than 20% down, you will be required to pay for private mortgage insurance (PMI) to protect the lender in the event of a default. The fees for lender’s insurance vary by the entity involved and ranges from 0.55% to 2.25%.

And there is one more protection policy involved when refinancing a mortgage: title insurance. Courthouse records are searched to determine if you have valid ownership of the house and land and to ascertain if there are any liens against the property.

Title insurance covers the cost of any errors made in such investigations in order to protect the mortgage lender — and optionally the owner. Costs vary by loan value, down payment, property location and provider.

You may also be required to pay for a survey of the property and improvements, unless one has been recently completed. This costs about $500.

A final tip on refinance closing costs

From each lender you apply to, you’ll receive a Loan Estimate so that you can easily do a side-by-side comparison of mortgage costs. Once you choose a lender, you’ll also receive a Closing Disclosure three days before finalizing your loan, detailing all of the charges that will be assessed at signing. That way there can be no surprises at the closing table.

Source: nerdwallet.com

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Gone are the days of option arms and stated income.

Going forward, the Federal Reserve wants a minimum set of mortgage underwriting standards implemented on most consumer home loans to avoid another housing crisis.

Today, they unveiled the “ability-to-repay requirement,” tied to the Dodd-Frank bill, which can be met in four different ways.

First, a bank or mortgage lender can meet the requirement by considering and verifying eight underwriting factors, including:

– income and assets
– current employment status
– monthly mortgage payment
– monthly payment on any simultaneous mortgage
– monthly payment for mortgage-related obligations
– current debt obligations
– debt-to-income ratio
– credit history

And if it’s an adjustable-rate mortgage, payment must be based on the fully indexed rate, not a start rate or teaser rate.

The second option allows a creditor to originate a so-called “qualified mortgage,” which provides the lender with special protections from liability.

There are currently two definitions of a qualified mortgage, but both wouldn’t allow amortization beyond 30 years, negative amortization, interest-only options, or balloon mortgages.

Additionally, each would limit mortgage points and fees to three percent of the loan amount, while verifying income and assets.

Option three allows a balloon-payment qualified mortgage if the creditor operates in a predominantly rural or underserved area.

Finally, option four allows for the refinancing of a non-standard mortgage into a “standard mortgage,” which has limits on loan fees and doesn’t contain any risky features such as negative amortization or interest-only features.

The proposal also prohibits prepayment penalties unless the mortgage is a prime, fixed-rate qualified mortgage.

All consumer mortgages are covered by these underwriting rules except home equity lines of credit, timeshare plans, reverse mortgages, and temporary loans.

While the rules aren’t yet finalized, it’s going to get a lot more difficult qualifying for a mortgage…

Source: thetruthaboutmortgage.com

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Today we’ll check out Florida-based lender “The Mortgage Firm,” which has been originating home loans since the mid-1990s.

That’s a lifetime in today’s world of nascent startups, and shows they’ve been able to weather the ups and downs of the housing market while earning a stellar reputation at the same time.

In fact, they were recently named the top mortgage lender by SocialSurvey for customer satisfaction, beating out dozens of other companies in their category.

Let’s learn more to see if they could be a good fit for you.

The Mortgage Firm Fast Facts

  • Direct-to-consumer retail mortgage lender
  • Offers home purchase financing, refinance loans, and reverse mortgages
  • Founded in 1995, headquartered in Orlando, FL
  • Funded about $3.5 billion in home loans last year
  • Licensed in 22 states and the District of Columbia
  • Does most of their business in home state of Florida along with Georgia

The Mortgage Firm is an independently operated direct-to-consumer retail mortgage lender that offers home purchase financing, mortgage refinance loans, and reverse mortgages.

They primarily serve home buyers and existing homeowners in the Southeastern United States, with their home state of Florida providing most of their overall volume.

Last year, they funded roughly $3.5 billion in home loans, making them a large-sized regional lender.

About two-thirds of their volume was dedicated to home purchase loans, with the rest mostly comprised of mortgage refinances.

At the moment, they’re licensed to do business in 22 states and the District of Columbia.

Those states include Alabama, Arizona, Arkansas, California, Colorado, Delaware, Florida, Georgia, Kentucky, Louisiana, Maryland, Massachusetts, Mississippi, New Hampshire, North Carolina, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Virginia, and Washington.

How to Apply with The Mortgage Firm

  • You have the option of working online or visiting a physical branch
  • Either way their digital mortgage application makes it easy to get tasks done
  • Borrowers can scan/upload documents, link bank accounts, and eSign disclosures
  • The entire loan process can be managed via the online borrower portal 24/7

To begin, you can either visit their website or go to a physical branch in-person. Most of their offices are located in Florida and adjacent states.

If you go online, there is a branch directory along with a loan officer directory. Assuming you know who you want to work with, you can simply click on “Apply.”

This will launch the digital mortgage application that is powered by ICE Mortgage Technology, formerly known as Ellie Mae.

It allows you to perform most tasks electronically, from the scanning and uploading of documents to the eSigning of disclosures.

Once your loan is submitted, you’ll also be able to manage all aspects of the process via the online borrower portal, which can be accessed via their website.

And they’ll send automatic updates to you throughout the process along with continual status reports to ensure there are no surprises.

After closing, The Mortgage Firm automatically provides a “HomeBinder” to all borrowers as a digital closing gift.

It puts all your closing documentation in the cloud so you can access your forms securely from anywhere if and when needed.

All in all, they appear to be big on the latest technology, which should make the entire loan process both convenient and hopefully fast as well.

Loan Programs Offered by The Mortgage Firm

  • Home purchase loans
  • Refinance loans
  • Home renovation loans
  • FHA/USDA/VA loans
  • Conforming loans backed by Fannie Mae and Freddie Mac
  • Jumbo loans
  • Reverse mortgages
  • Fixed-rate options: 10, 15, 20, and 30 year terms
  • Adjustable-rate options: 5/1 and 7/1 ARM
  • Can finance primary, second homes, and investment properties

One advantage to using The Mortgage Firm is their deep menu of available loan programs.

Whether you’re purchasing a home, refinancing an existing mortgage, or renovating a property, they should have a loan to fit your needs.

They offer just about anything you could ask for, from government-backed stuff like FHA and VA loans to jumbo loans and even reverse mortgages in some states.

They can finance primary residences, second homes, and investment properties, along with condos/townhomes.

With regard to specific loan types, you can get a fixed-rate mortgage in a 10, 15, 20, or 30-year term, or an adjustable-rate mortgage such as a 5/1 or 7/1 ARM.

The Mortgage Firm Rates

Unfortunately, The Mortgage Firm doesn’t post its daily mortgage rates online like some other lenders.

As such, you’ll need to get in touch with a loan officer to discuss loan pricing and eligibility before proceeding to the application.

The same goes for their lender fees, which appear to be absent from their website. Be sure to inquire about all fees, including application, loan origination fee, and so on.

Once you know all those things, you can shop their quoted mortgage APR with other lenders to find the best deal.

Ultimately, I don’t know how competitive they are relative to other companies, so do take the time to obtain other quotes.

However, their fantastic reviews and customer satisfaction awards tell me they must be doing something right on the pricing front.

The Mortgage Firm Reviews

On SocialSurvey, The Mortgage Firm has a strong 4.91-star rating out of a possible 5 from about 30,000 customer reviews.

The sheer volume of reviews shows they’re consistently making their clients happy.

Additionally, they were ranked the top mortgage company for customer satisfaction in 2019 by SocialSurvey in the “large” category and previously won the “medium” category in 2018.

So it appears they’re growing and maintaining a very strong reputation at the same time.

Over at Zillow, they have a super impressive 4.96-star rating from about 1,000 customer reviews. Be sure to filter by loan officer to find those who go above and beyond.

On Google, they have a 4.9-star rating from about 1,000 reviews as well.

And while they aren’t an accredited business with the Better Business Bureau, they do maintain an ‘A’ rating based on complaint history.

To sum it up, if you’re looking for a convenient loan process from a very highly-rated mortgage lender, The Mortgage Firm could be for you.

Their wide range of available loan programs coupled with their many ways to apply makes them appealing to both first-time home buyers and existing homeowners.

The Mortgage Firm Pros and Cons

The Good

  • Offer a fully digital mortgage application
  • Can apply for a home loan directly from their website
  • Also have physical branches in many Southeastern states for those who wish to do business in person
  • Lots of different loan programs to choose from including reverse mortgages
  • Excellent reviews from thousands of customers across multiple ratings websites
  • Won multiple customer satisfaction awards
  • Free mortgage calculators and mortgage glossary online
  • Free HomeBinder account as a closing gift

The Maybe Not

  • Aren’t licensed in all states
  • Do not list mortgage rates or lender fees on their website
  • May not service your loan after closing

Source: thetruthaboutmortgage.com

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Alabama may be known for Southern hospitality, Gulf Coast beaches and some serious football fans, but it also has a few hazards to look out for. Alabama homeowners should make sure they have insurance coverage for hurricanes, tornadoes and other natural disasters that could strike their homes.

NerdWallet analyzed rates from insurers across the state to determine the best homeowners insurance in Alabama.

Note: Some insurance companies included in this article may have made changes in their underwriting practices and no longer issue new policies in your state.

Why you can trust NerdWallet

Our writers and editors follow strict editorial guidelines to ensure fairness and accuracy in our writing and data analyses. You can trust the prices we show you because our data analysts take rigorous measures to eliminate inaccuracies in pricing data and may update rates for accuracy as new information becomes available.

We include rates from every locale in the country where coverage is offered and data is available. When comparing rates for different coverage amounts and backgrounds, we change only one variable at a time, so you can easily see how each factor affects pricing.

Our sample homeowner had good credit, $300,000 of dwelling coverage, $300,000 of liability coverage and a $1,000 deductible.

The best homeowners insurance in Alabama

If you’re looking to buy homeowners insurance from a well-rated national brand, consider one of these insurers from NerdWallet’s list of the Best Homeowners Insurance Companies.

More about the best home insurance companies in Alabama

See more details about each company to help you decide which one is best for you.

Farmers

Those seeking benefits like diminishing deductibles and claims forgiveness may want to consider Farmers.

Coverage options

More than average

Average set of discounts

NAIC complaints

Fewer than expected

Farmers

Those seeking benefits like diminishing deductibles and claims forgiveness may want to consider Farmers.

Coverage options

More than average

Average set of discounts

NAIC complaints

Fewer than expected

Homeowners policies from Farmers may include two valuable types of insurance: extended dwelling and replacement cost coverage. Extended dwelling coverage gives you extra insurance for the structure of your house, while replacement cost coverage offers higher reimbursement for stolen or destroyed belongings.

Some Farmers policies also come with perks that can save you money. For example, with claim forgiveness, Farmers won’t raise your rate for a claim as long as you haven’t filed one within the past five years.

State Farm

Well-established insurer with a lengthy list of coverage options.

Coverage options

More than average

Average set of discounts

NAIC complaints

Fewer than expected

State Farm

Well-established insurer with a lengthy list of coverage options.

Coverage options

More than average

Average set of discounts

NAIC complaints

Fewer than expected

As America’s largest insurer, State Farm stands out for its long list of coverage options. Its policies generally include extra dwelling coverage in case it costs more than expected to rebuild your home after a covered disaster. You may also be able to add coverage for things like identity theft, damage from backed-up drains and personal injury liability.

State Farm offers a free Ting device as a perk for home insurance policyholders. Ting is a smart plug that monitors your home’s electrical network to help prevent fires.

Cincinnati Insurance

Sells homeowners policies through local independent agents across the U.S.

Coverage options

More than average

Average set of discounts

NAIC complaints

Far fewer than expected

Cincinnati Insurance

Sells homeowners policies through local independent agents across the U.S.

Coverage options

More than average

Average set of discounts

NAIC complaints

Far fewer than expected

Cincinnati Insurance sells homeowners policies through independent agents, with various options for standard and high-value homes. You may be able to add coverage for issues like identity theft, personal cyberattacks or certain types of water damage.

Cincinnati may offer you a discount for bundling home and auto insurance, having a newer home, installing a centrally monitored alarm system or going a certain amount of time without filing a claim.

Country Financial

Best for those who prefer to have a personal conversation with an agent when choosing coverage.

Coverage options

More than average

Great set of discounts

NAIC complaints

Far fewer than expected

Country Financial

Best for those who prefer to have a personal conversation with an agent when choosing coverage.

Coverage options

More than average

Great set of discounts

NAIC complaints

Far fewer than expected

Country Financial has three levels of homeowners coverage to help you choose the package that’s best for you. You also have the option to add extra coverage for the structure of your home, in case inflation drives up the cost of rebuilding more than you expect.

Country Financial sells homeowners insurance through local representatives. The company has drawn far fewer complaints than expected to state regulators, according to the National Association of Insurance Commissioners.

Nationwide

For shoppers seeking a broad range of coverage options, Nationwide may fit the bill.

Coverage options

More than average

Great set of discounts

NAIC complaints

Close to expected

Nationwide

For shoppers seeking a broad range of coverage options, Nationwide may fit the bill.

Coverage options

More than average

Great set of discounts

NAIC complaints

Close to expected

Nationwide’s standard homeowners policies include ordinance or law coverage, which pays to bring your home up to the latest building codes after a covered claim. They also include coverage for unauthorized credit or debit transactions. For an extra cost, you may be able to add coverage for things like water backup, identity theft and stronger materials to replace your roof.

The Nationwide website offers plenty of ways to manage your policy, including filing and tracking claims, paying bills and getting quotes.

USAA

Offers perks and affordable rates for the military community.

Coverage options

Below average

Average set of discounts

NAIC complaints

Far fewer than expected

USAA

Offers perks and affordable rates for the military community.

Coverage options

Below average

Average set of discounts

NAIC complaints

Far fewer than expected

USAA sells homeowners insurance to veterans, active-duty military members and their families. If that description fits you, you may want to consider a USAA policy. The company’s homeowners insurance has certain features that other insurers may charge extra for.

For example, USAA automatically covers your personal belongings on a “replacement cost” basis. Many companies pay out only what your items are worth at the time of the claim, which means you may not get much for older items. USAA pays enough for you to buy new replacements for your stuff.

How much does homeowners insurance cost in Alabama?

The average annual cost of home insurance in Alabama is $2,385. That’s 31% more than the national average of $1,820.

In most states, including Alabama, many insurers use your credit-based insurance score to help set rates. Your insurance score is similar but not identical to your traditional credit score.

In Alabama, those with poor credit pay an average of $4,420 per year for homeowners insurance, according to NerdWallet’s rate analysis. That’s 85% more than those with good credit.

Average cost of homeowners insurance in Alabama by city

How much you pay for home insurance in Alabama will depend on your ZIP code. For example, the average cost of homeowners insurance in Birmingham is $2,270 a year, while homeowners in Mobile pay an average of $2,690 per year.

Average annual rate

Average monthly rate

Albertville

Birmingham

Enterprise

Huntsville

Montgomery

Phenix City

Prattville

Tuscaloosa

The cheapest home insurance in Alabama

Here are the insurers we found with average annual rates below the Alabama average of $2,385.

What to know about Alabama homeowners insurance

Alabama faces more than its share of risks for homeowners. When shopping for homeowners insurance, you’ll want to consider hurricanes, flooding and tornadoes.

Hurricanes and tropical storms

With its Gulf Coast location, Alabama is susceptible to hurricanes and the property damage that comes with them. For example, in 2004, Hurricane Ivan passed through Alabama, causing 117 tornadoes over three days due to the high winds. These severe weather events can cause significant damage to your home.

Review your policy to see what coverage you have. Your policy likely covers wind damage, but you may have a separate wind, hail or hurricane deductible. (A deductible is the amount subtracted from your claim payout.)

For example, your policy may have a $1,000 deductible for most claims and a 1% deductible for wind claims. So if your house has $200,000 worth of dwelling coverage, you’d be responsible for the first $2,000 of wind damage yourself.

Hurricanes can also cause flood damage, which most homeowners insurance doesn’t cover. If you live in a high-risk area, you’ll likely need a separate policy for flood insurance as well.

Flooding

Beyond the hurricanes and tropical storms mentioned above, Alabama homeowners may experience flooding due to any type of heavy rain. Because standard homeowners insurance policies don’t pay for flood damage, you’ll want to consider purchasing flood insurance if you live in a flood-prone area.

To find out whether you’re at risk, check the Federal Emergency Management Agency’s flood maps or visit RiskFactor.com, a website from the nonprofit First Street Foundation. Because flooding can happen anywhere if it rains hard enough, you may want to consider buying flood insurance even if you’re in a relatively low-risk location.

Note that while you can purchase flood coverage anytime, there’s typically a 30-day waiting period before the insurance takes effect.

Tornadoes

Parts of Alabama are likely to experience tornadoes, as the state sits in Dixie Alley, Tornado Alley’s Southeastern counterpart. The forceful winds from a twister can damage or even destroy a house.

Your homeowners insurance policy probably covers tornado damage. Still, as with the hurricane wind damage discussed above, it’s important to review your policy to determine how much coverage you have. Some policies have a separate deductible for wind damage, meaning potential extra costs for you in case of a claim.

Alabama insurance department

The Alabama Department of Insurance oversees the state’s insurance industry and provides consumer protections. On its site, you can search for licensed insurance companies and access information for homeowners. If you have a complaint about your insurance company, you can file it online with the department. You can also call the agency’s consumer services hotline with insurance questions at 800-433-3966.

Looking for more insurance in Alabama?

Frequently asked questions

Is homeowners insurance required in Alabama?

Homeowners insurance isn’t required by Alabama state law, but your mortgage lender will likely require you to have it.

How can I save money on home insurance in Alabama?

There are several ways to save money on homeowners insurance in Alabama:

  • Shop around for the best rate. An independent insurance agent can help.

  • Choose a higher deductible. In case of any claims, you’ll pay more out of pocket, but you’ll pay less in annual or monthly premiums.

Does Alabama home insurance cover flooding?

A standard home insurance policy in Alabama won’t cover flooding. That means you may want to buy separate flood insurance if your home is in a high-risk area.

Amanda Shapland contributed to this story.

Source: nerdwallet.com

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Have you checked the mortgage interest rates lately?

If you’ve got excellent credit you can get mortgage loans with interest rates near or below 3.5%, assuming your income and collateral are also in good shape.

Add that to a still recovering real estate market and now might be the time to pull the trigger on a home loan.

The Mortgage Loan Application Process is Unique

First off, borrowing money to buy a house will likely represent the largest financial liability you’ll ever have.

Second, managing a mortgage is unlike the management of any of type of loan due to property taxes, insurance, and impounds.

Finally, unlike a credit card, auto loan, or any other type of credit application process, the mortgage loan application process is unique.

Normally when you apply for a credit card or auto loan, the lender will pull one of your credit reports accompanied by one of your credit scores. They’ll then use that information as a basis for their decision about your application.

They almost never attempt to pull your other two credit reports and scores.

Mortgage lenders, however, almost always pull all three of your credit reports and your three credit scores as part of their standard loan application process.

And, if you are applying with another person, the mortgage lender will pull all three of their credit reports and credit scores as well.

This unique process yields a great deal of information. The aggregate leaves the lender with six credit reports and six credit scores.

Normally, the mortgage lender will “use” the middle numeric scores as to base their decision. That might solve the credit score issue, but it doesn’t solve the credit report issue.

Six credit reports, especially belonging to older applicants, can be overwhelming.

What is a Residential Mortgage Credit Report?

Normally a non-mortgage lender will simply go directly to a credit bureau and pull a report. But, in the mortgage world there’s an intermediary party referred to as a mortgage reporting company.

These companies pull the applicant’s credit reports on behalf of the lender/mortgage broker and then consolidate the information into one easy to read file.

This report is called an “RMCR” or Residential Mortgage Credit Report.  They are also informally referred to as “Tri-merges.”

The information is merged, but more often it is done cosmetically, meaning your credit reports don’t really magically become combined with that of your co-applicant. Tri-merges are very easy to read as the mortgage reporting company will reorganize the information.

All of the scores go in one section. All of the positive information goes in one section– and yes all of the bad information goes in one section too.

Why Do Mortgage Lenders Need All Three Credit Reports?

There’s actually a very good reason mortgage lenders pull all three of your credit reports. First off, because of the amount of money being lent, the lender or funding source (Fannie Mae or Freddie Mac) requires that no credit stone be left unturned.

Credit reports, while considerably redundant, are rarely identical across the three credit reporting agencies. Pulling three reports all but guarantees the lender will see all of your financial liabilities, while pulling just one does not.

Additionally, you won’t have three identical credit scores.  Pulling all three of your scores (or all six if you have a co-applicant) is a conservative approach to risk assessment.

It gives the lender a choice to base their decision on the applicant’s highest score, lowest score, or middle score. The middle score approach has been around for roughly 15 years, give or take.

How the Additional Inquiries Affect Your Credit

Don’t worry about the inquiry times three.  Mortgage inquiries are among the least problematic to your scores and are considerably discounted by FICO’s scoring system.

In fact, the first 30 days on your credit file mortgage inquiries are ignored. That gives you the ability to shop around for the best rate without being worried about any negative score impact.

Happy house hunting!

John Ulzheimer is the President of Consumer Education at SmartCredit.com, the credit blogger for Mint.com, and a contributor for the National Foundation for Credit Counseling.  He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry. The opinions expressed in his articles are his and not of Mint.com or Intuit. Follow John on Twitter.

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