IS IT BETTER TO GET MORTGAGE PRE-APPROVAL UPFRONT?
- Realtors will be more willing to work with you and search for a new home.
- When buying a new home, Realtors and sellers can rest assured. They will know that a trusted lender has reviewed your income, assets, credit and you are qualified and ready to purchase.
- It helps you identify any problems you may have. For example, too much debt, a low credit score, etc. It gives you time to correct them as needed and to obtain the best interest rates from a local lender.
- You’ll save time by only looking at real estate within your purchase price range.
- Make an offer as soon as you find the perfect house.
- Sellers will take you seriously. And are more likely to accept your offer over other home buyers who are not.
- This helps you negotiate a better offer.
- The seller can expect fewer delays with your offer. Thus, making your offer more attractive.
- Can help first time home buyers in a Bidding War.
- Expedites the time to submit an offer.
- We can offer the best mortgage rates in Kansas City, with simple credit improvements.
WHAT DOCUMENTATION IS NEEDED TO GET PRE-APPROVED?
The lender will need to review your financial information. Such as; your income, assets, and credit history. This will determine the types of first mortgages you are eligible for when buying a new home in Kansas City. Please find a checklist below:
Mortgage Pre-approval Checklist:
- Most recent pay-stub(s)
- Last two years W2’s
- Last two months bank statements (all pages) reflecting sufficient funds for closing
- A picture of your driver’s license(s)
- Two years personal tax returns (Self-employed) and two years business tax returns (own more than 25% of the business)
Depending on your personal situation, additional items may be required by the mortgage lender. Your local Loan Officer in our Overland Park office will guide you through the new home buying process and cover the available home loans and best interest rate.
HOW LONG DOES IT TAKE TO GET PRE-APPROVED FOR A MORTGAGE LOAN?
A mortgage pre-approval letter will typically take one business day. Your letter will be emailed and will also include an Initial Fee Worksheet (IFW).
The IFW is a estimate which details the housing payment. Such as; payment, property taxes, insurance, mortgage insurance and HOA dues. The loan amount, qualified interest rate, down payment and closing costs. The letter will be issued by our Overland Park, KS office.
HOW LONG DOES A PRE-APPROVAL LETTER LAST?
The most common question we receive is “How long does a pre-approval letter last?”
Typically, the letter is good for up to 120 days from the date the credit report is obtained. You would need to close on your dream home within this time period. To extend the expiration date of the letter is simple. We will need to re-pull credit, obtain updated pay-stubs, and bank statements.
HOW FAR IN ADVANCE SHOULD I GET PRE APPROVED FOR A MORTGAGE?
The best time to get preapproved for a home mortgage is a week before you buy a home. You will know how much you’re qualified to borrow, preapproval helps you decide how much you can afford. However, most homebuyers do not spend as much on a home as they are approved for.
WHAT IS THE DIFFERENCE BETWEEN PREAPPROVED AND PREQUALIFIED?
Qualification differs from a pre-approval. In that, prequalification is a verbal assessment of whether your debt-to-income ratio fits the loan program guidelines. Prequalification also provides the best estimate of how much you can afford.
Getting a pre-approval, on the other hand, involves the same steps as a loan application. You’ll provide detailed information about your income and assets that will be reviewed by an automated underwriting system (AUS).
If pre-approved, you’ll get a letter in your name for a specific terms. Such as; mortgage loan amount, loan terms, and a “to be determined” address. This will be sent to you by email.
DOES IT HURT YOUR CREDIT SCORE TO GET PRE-APPROVED FOR A MORTGAGE?
When a lender obtains your credit report, it is a hard inquiry. The impact on your credit score is usually less than 5 points. However, a credit inquiry can have a greater impact when you have already applied with multiple credit types. For example, home loans, auto loans, credit cards, and installment loans. The FICO models allow you to inquire with multiple lending companies within a 30-day period and count as one credit inquiry.
WHAT CREDIT SCORE DO YOU NEED TO GET PRE-APPROVED FOR A MORTGAGE?
A minimum credit score of at least 620 is required for Conventional loans. With a higher credit score you will qualify you for a better interest rate. A credit score of 740 or above will enable most borrowers to qualify for the best mortgage rates.
HOW DO I QUALIFY FOR A KANSAS CITY HOME LOAN ONLINE?
Online mortgage pre-approval is quick and easy with our 5-minute application. The online application will cover basic borrowers’ information. For example, residency, employment history, social security number, contact information, and bank account information. A lender pre-approval is not a final approval. Your application will need to be underwritten before receiving a final loan commitment from our office. Check out the different types of financing and use our live mortgage calculator to run a monthly payment. After reviewing today’s competitive interest rates and save money.
Mortgage Preapproval FAQ
Yes, your pre-approval letter shows the amount you requested or the maximum loan that you qualify for. You should buy a home that you feel comfortable with the monthly payment.
The most commonly used FICO® Scores for mortgage lending are:
- Experian – FICO®Score 2, or Experian/Fair Isaac Risk Model v2. FICO® Score 5, or
- Equifax Beacon 5. FICO®Score 4, or
- TransUnion FICO®Risk Score 04, or Classic 04.
Yes, it’s possible a mortgage can get denied even after pre-approval. A mortgage pre-approval is an initial review of your income, assets, and credit. Should there be any adverse changes it can impact your pre-approval letter. Additionally, an appraisal or inadequate insurance can also have an impact. Finally, an underwriter does make the final decision on the whether a loan is approved or denied.
LET’S DISCUSS HOME LOANS AND GET STARTED ON YOUR PRE-APPROVAL TODAY!
Have Questions? Speak with an experienced Loan Officer at Metropolitan Mortgage Corporation. Let’s discuss the best programs, interest rates and you will be on your way to purchase your new dream home. Please contact our Customer Service online or call us by phone at (913) 642-8300 today.