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In order to complete your pre-approval letter, you will need to furnish basic personal information; such as employment, and asset information.
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About Metropolitan Mortgage
Since 1997, we’ve helped over 10,000 families in Kansas City achieve their dream of homeownership as a local direct mortgage lender. Our experienced staff has decades in the industry and is dedicated to providing exceptional service. We’re honored to be recognized as a top lender in Kansas City by Five Star Professionals. Referrals are the foundation of our business, and we take pride in operating with integrity while ensuring a smooth homebuying experience for our customers.
Common Questions Regarding pre-approval
What is Mortgage Pre-Approval? Mortgage pre-approval is an initial assessment by a lender that determines how much you can borrow to purchase a home. It involves a thorough review of your financial situation, including your income, assets, debts, and credit history.
Why is Mortgage Pre-Approval Important? Pre-approval offers several benefits for homebuyers:
- It gives you a clear understanding of your budget and helps you focus your search on properties within your price range.
- Sellers view pre-approved buyers as serious and financially qualified, potentially giving you an edge in a competitive market.
- It streamlines the home buying process by expediting loan approval once you find the perfect home.
What Information and Documents Do You Need for Pre-Approval? To expedite the pre-approval process, gather the following documents:
- Proof of income (pay stubs and W-2 forms)
- Documentation of assets (checking, savings, investments, retirement accounts
How Does the Pre-Approval Process Work? The pre-approval process typically involves the following steps:
- Application: You complete a mortgage application and provide documentation of your income, assets, debts, and other financial information.
- Verification: The lender verifies the information provided, including employment and income verification, credit check, and assessment of your debt-to-income ratio.
- Pre-Approval Decision: Based on the evaluation, the lender determines the maximum loan amount you qualify for and issues a pre-approval letter.
Will pre-approval affect my credit score? The pre-approval process typically involves a hard inquiry on your credit report, which may temporarily affect your credit score. However, multiple inquiries within a short period for mortgage pre-approval purposes are usually treated as a single inquiry to minimize the impact on your score.
How Long Does Pre-Approval Take? The pre-approval process usually requires a few hours for completion, although this timeline can vary based on the lender’s workload and the intricacy of your financial circumstances. Ensuring prompt submission of all necessary documentation is crucial to speeding up the process.
How long does pre-approval last? Pre-approval typically remains valid for approximately 120 days from the date your credit report is acquired. Should there be any changes in your financial circumstances or if your pre-approval expires, you may need to provide updated documents, such as recent paystubs and bank statements.
Does Pre-Approval Guarantee Loan Approval? While pre-approval increases your likelihood of securing a mortgage, it’s not a guarantee. Final loan approval is contingent on factors such as property appraisal, title search, and underwriting review.
Are there any fees associated with mortgage pre-approval? At Metropolitan Mortgage, we do not charge any fees for mortgage pre-approval.
What happens if my financial situation changes after pre-approval? If your financial situation changes after pre-approval, such as a decrease in income or an increase in debt, it could affect your loan eligibility. It’s crucial to notify your lender of any significant changes to reassess your pre-approval status.
What factors can affect my pre-approval amount or status? Several factors can affect your pre-approval amount or status, including your credit score, income, debt-to-income ratio, employment history, and assets.
What happens if I don’t get pre-approved before making an offer? If you don’t get pre-approved before making an offer, you will likely lose out on the property to a pre-approved buyer. Additionally, sellers may be hesitant to accept an offer from a buyer without pre-approval.
What if my pre-approval amount is lower than expected? You may be able to increase your purchasing power by paying down debts in certain situations. Otherwise, you might need to consider adjusting your budget or exploring alternative financing options. It’s crucial to have a discussion with your lender to determine the most suitable course of action.
Can I still be denied a mortgage after pre-approval? Yes, it’s possible to be denied a mortgage after pre-approval if there are significant changes to your financial situation or if the property you intend to purchase does not meet the lender’s criteria. Final loan approval is contingent on several factors, including property appraisal and underwriting review.