When to Buy a House: If Credit Score Repull on Closing Day Gets You a Better Rate
Buying a house is a significant financial decision that requires careful planning and consideration. One crucial factor that can greatly impact your homebuying journey is your credit score. A good credit score not only determines your eligibility for a mortgage loan but also affects the interest rate you will receive. However, what if your credit score could be repulled on the closing day to potentially get you a better interest rate? In this article, we will explore the concept of credit score repull on closing day and discuss when it may be beneficial to consider this option.
The idea behind credit score repull on closing day is that lenders may be willing to reevaluate your creditworthiness just before the closing of the house. If your credit score has improved since the initial mortgage application, you may be eligible for a better interest rate.
So when should you consider going for a credit score repull on closing day? Here are a few scenarios where it may be advantageous:
1. Significant improvement in credit score: If you have taken steps to improve your credit score, such as paying off debts or resolving any disputes, it may be worthwhile to request a credit score repull.
2. Better market conditions: If interest rates have decreased since your initial mortgage application, a credit score repull may help you secure a lower rate.
3. Close to a higher credit score bracket: If you are just a few points away from reaching a higher credit score bracket, a repull could potentially push you into that bracket and result in a better rate.
4. Time since last credit inquiry: If it has been a while since your last credit inquiry, a credit score repull may not have a significant impact. However, if you have recently opened new credit accounts or had multiple credit inquiries, it may be best to wait before requesting a repull.
5. Flexibility in closing timeline: If you have some flexibility in your closing timeline, it allows for the necessary time to go through the credit score repull process without delaying the purchase of your new home.
Now, let’s address some frequently asked questions about credit score repull on closing day:
1. How does a credit score repull work?
A credit score repull involves requesting the lender to reevaluate your creditworthiness just before the closing of the house. They will pull your credit report again to assess any changes in your credit score.
2. Will a credit score repull affect my credit score?
A credit score repull may result in a hard inquiry on your credit report, which can temporarily lower your credit score. However, the impact is typically minimal and short-lived.
3. Can I request a credit score repull if my credit score has worsened?
It is generally not advisable to request a credit score repull if your credit score has worsened since the initial mortgage application. Lenders may view this negatively, potentially affecting your loan approval or interest rate.
4. Can I request a credit score repull with any lender?
Not all lenders offer the option of a credit score repull on closing day. It is best to inquire with your lender about their policies regarding credit score evaluation.
5. Is there a fee for a credit score repull?
Some lenders may charge a fee for conducting a credit score repull. It is essential to clarify any potential costs with your lender before proceeding.
6. Can I negotiate my interest rate based on the credit score repull?
While a credit score repull may provide an opportunity for negotiation, it ultimately depends on the lender’s policies and market conditions. It is advisable to discuss this with your lender to understand the possibilities.
7. How long does a credit score repull take?
The time required for a credit score repull can vary depending on the lender. It is best to check with your lender about their timeline for conducting a credit score evaluation.
In conclusion, a credit score repull on closing day can potentially help you secure a better interest rate if your credit score has improved or market conditions have changed. However, it is crucial to consider the specific circumstances and consult with your lender before requesting a repull. Understanding the process and potential impacts will empower you to make an informed decision regarding your homebuying journey.