The purchase of a home is one of the largest investments you can make which is why it is so important to shop around in order to find the best deal. While mortgage shopping does lead to credit inquiries, the effect on your credit score is very minimal and if you shop smart you are likely to only see your score drop a few points.
While you are shopping for a mortgage you may have your credit pulled several times by different lenders as you compare rates and fees. You won’t have to worry about your credit score taking a big hit from this as credit bureaus allow home buyers a two week period where you can compare rates with multiple lenders and your credit report will only be charged with one inquiry. Also keep in mind that new credit makes up only 10% of your FICO score, so having a lender pull your credit report is estimated to lower your score by only five points.
When comparing rates you must note that rates change daily often times multiple times per day. With that being said you will want to get your quotes within the same day in order to get a true rate comparison. You also want to make sure you are looking not only at the headline rate but also the annual percentage rate (APR). The APR is a better reflection of what you will actually be paying as it includes additional fees into the rate. However, be careful when comparing APRs between lenders as they are not required to charge the same fees as one another.