Weigh Costs and Benefits
Of Multiple Preapprovals

Question: I'd like to be preapproved by several lenders so that I don't have to start from scratch if I learn about "hidden" fees late in the application process. But mortgage lenders tell me that obtaining several preapprovals at the same time can adversely affect my credit rating. Is this true?

-- Arif, city not provided

Arif: Getting preapproved is definitely a good first step in the home-buying process. But each time you apply for credit, it is noted by the credit bureaus. When your credit is scored by a company such as Fair, Isaac & Co., too many credit applications are thought to increase lenders' risk, so your score could be adversely affected. To get more information on this, visit myFICO. For $12.95, you can obtain your own credit score! (Though having your credit report pulled by many lenders can hurt your score, getting your own report directly from a credit-reporting company shouldn't.)

Consider asking lenders to disclose all of their fees up front. Any legitimate lender should give you this information in writing without first asking you to go through the preapproval process.

Mr. Irwin has more than 25 years' experience as a Los Angeles-area real-estate broker. He is the author of more than two dozen books about real estate and is recognized as one of the most knowledgeable writers in the real-estate field. Mr. Irwin's most recent book is "Tips and Traps When Renovating Your Home," (McGraw-Hill, 2000).

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