Multiple Mortgage Applications

When the time comes to apply for a mortgage, you may be tempted to apply to more than one mortgage lender. If you do your homework and pick a good lender with a reputation for low rates, quality service, and playing straight and meeting borrowers' expectations, applying for more than one mortgage won't be necessary on most properties. When you apply for a second loan, you must pay additional application fees and spend more time and effort completing extra paperwork.

Applying to more than one mortgage lender makes more sense in special situations where you run a greater risk for having your loan application denied.

• The first case is when you have credit problems.
• The second circumstance under which it makes sense to apply to more than one mortgage lender is when you want to buy a physically or legally "difficult" property.

It's impossible, of course, to know in advance all the types of property idiosyncrasies that will upset a particular lender. Minimize your chances for negative surprises by asking your agent and property inspector whether any aspects of the property may give a lender cause for concern.

If you apply for two loans, tell both lenders that you're applying elsewhere. When the second lender pulls your credit report, the first lender's recent inquiry will show up. (Less-than-candid borrowers almost always get caught this way.) Also tell both lenders that you're sincerely interested -- just as you would tell all prospective employers.