What You Need to Know About FHA Loans and Pre-Approval
November 26, 2024
Pre-approval for a home loan means a credit check, so be prepared to fill out basic credit information as part of the process.
Some at this stage might wonder: "Will applying for pre-approval hurt my credit score?"
What's a FICO Score and Why Should I Care?
Your FICO score is a three-digit number that sums up your risk as a borrower. It's based on your credit history, and FHA lenders use this score to decide if they want to give you a loan and what interest rate they'll charge. The higher your score (the best is 850), the better your chances of getting a good deal.
Good News About Pre-Approval
Applying for pre-approval typically results in a temporary change to your FICO score. Why? Because lenders perform a "soft inquiry" on your credit. It's like a quick background check, not a full-blown credit application. They can look at your credit history, but it doesn't affect your score.
Shop Around for an FHA Lender Without Worry
You know how you compare prices before you buy something big? Well, FICO knows you do that with mortgages, too. They have a "rate shopping window," usually 45 days long, and during this time, you can apply with multiple FHA lenders, which only counts as one inquiry on your credit report.
Things That Can Affect Your Score
If you apply with FHA lenders over a long period (past the 45-day window), it can look like you're desperate for credit.
Also, make sure your credit report is accurate. Credit report mistakes are more common than you might think. They can lower your score, so check your credit before you apply and fix any errors.
Keep Your FICO Scores Safe
Want to minimize any impact on your credit score? Here's one plan to consider:
- Apply within the 45-day window. Get those pre-approvals done quickly to take advantage of the rate shopping feature.
- Don't go overboard. It's good to compare offers, but don't apply with every lender under the sun. Pick a few that seem like a good fit.
- Check your credit report. Before applying, get a copy of your credit report and make sure everything is correct.
Keep in mind that pre-approval doesn't guarantee you'll get the loan. It's a good estimate, but the lender will examine your finances more thoroughly before they give you final approval.
Getting pre-approved is a smart step when you're buying a home. Be smart about how you apply, and keep your credit report clean.
FHA Loan Articles
June 30, 2026FHA loans offer low down payment options and more forgiving credit requirements for borrowers who may not qualify for a conventional mortgage or need to save more money out of pocket at the front end of the mortgage. But even with more forgiving credit requirements, some borrowers are tempted to omit certain debt information from their home loan applications. What does it mean to conceal a debt or financial situation from your loan officer?
June 30, 2026Some borrowers start working on their credit scores but get impatient with the process because they can't predict when their efforts will change their FICO scores. How long does it take for your FICO scores to update when you pay off a loan, reduce your credit card balances, or take other steps to make yourself a better credit risk? The short answer is that credit reporting procedures are not standardized, and it may take more time than you realize to get those positive credit actions added to your credit report.
June 29, 2026Mortgage interest rates are "moving targets" shaped by national economic trends and the borrower's specific financial profile. What is your FHA loan interest rate? Much depends on the financial data you bring to the table. Lenders set interest rates daily based on a snapshot of market conditions, but the rate ultimately offered also reflects risk, equity, and the lending institution's internal operational costs.
June 28, 2026An FHA appraisal differs from a conventional appraisal. While the goal of a conventional appraisal centers on market value, the FHA appraisal also focuses on the buyer's safety and soundness. FHA lenders select the appraiser, not the home buyer.
June 24, 2026FHA loan closing costs vary by property price and geographic location, rather than by a single nationwide flat fee. Total settlement charges combine percentage-based fees, local government taxes, and marketplace service costs. If you are new to buying a home, you'll want to get familiar with the closing cost issues discussed here to avoid budgetary surprises later on.
