Even after you’ve been pre-approved for a Kansas City home loan, you are not guaranteed a loan for the property you settle on afterward. The full home loan process requires an in-depth assessment of both the property’s credentials and your qualifications.
This assessment is usually carried out by the lender or lending company’s underwriter, who follows the lender’s unique guidelines for full approval. While guidelines vary, they typically cover three major qualities, including your:
- Ability to pay
- Willingness to pay
- Choice of collateral
Ability to Pay
Much like the pre-approval process, the Kansas City home loan approval process looks at your income and debt-to-income ratio to ensure you are able to pay back the money you borrow. However, since the 2007 housing bubble burst, the government requires that all qualified mortgages also use your savings, bonds, and employment history to determine if you qualify. For instance, you must be consistently employed for the last two years in order to be approved for a Kansas City home loan.
Willingness to Pay
To prove that you are willing to pay the large amount of money borrowed for your new home, you must have a good credit history. By showing you have willingly paid off other loans, you are a more trustworthy candidate for a Kansas City home loan.
If your credit score or history does not currently qualify you for the home loan you want, there are steps you can take to improve your standing. With the exception of medical bills, it’s important to take care of all collections or judgments on your credit report in order to attain a Kansas City home loan.
Choice of Collateral
In the event that you foreclose on your Kansas City home loan, your home will be used as collateral. Therefore, your lender must make sure the value of thevproperty you choose does not exceed or fall behind the amount of money you wish to borrow.