Most preapprovals are good for 90 days, but some lenders issue 60-day and 30-day limits. Best practice is to get preapproved for a mortgage just before you begin serious house hunting.
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When a lender issues a mortgage preapproval letter, the document will indicate that it is only valid for a limited period of time. Most lenders issue 90-day preapprovals, but each lender sets its own time limit, and letters with 60-day and 30-day limits are issued as well.
Because preapprovals have relatively short shelf lives, its wise to time your preapproval applications carefully so you can use them effectively. Its also important to know how long a preapproval will last before you apply. Heres an overview of how to apply for a preapproval and how to use it efficiently.
Getting pre-approved for a home loan is an important first step when buying a house. It shows sellers that you are a serious buyer who has been vetted by a lender. But mortgage pre-approvals do expire after a certain period of time. Typically, they are valid for 60 to 90 days.
What is Mortgage Pre-Approval?
Pre-approval is when a mortgage lender reviews your finances and approves you for a specific loan amount. To get pre-approved, you’ll submit documents like pay stubs, tax returns, and bank statements. The lender will check your income, assets, debts, and credit score.
If you meet the requirements, the lender will issue a pre-approval letter. This letter states the maximum mortgage amount, interest rate, and loan program you qualify for.
Pre-approval doesn’t guarantee final loan approval. But it shows sellers you’re likely to get a mortgage. Final approval requires more documentation, like an appraisal of the home.
Why Get Pre-Approved?
Here are some key benefits of getting pre-approved before house hunting
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Know your budget, Pre-approval tells you the price range you can afford This helps narrow your home search
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Strengthen your offer. Sellers often prefer bids from pre-approved buyers. It shows you can get financing to complete the purchase.
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Speed up closing Much of the paperwork is done upfront. Once your offer is accepted, you can close more quickly.
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Improve your rate. Pre-approval also gives you time to boost your credit score for better loan terms.
When to Get Pre-Approved
Aim to get pre-approved when you are ready to actively look for a home. There’s no set timeline, but 1-2 months before you plan to buy is typical. You want your letter to still be valid when you’re ready to make an offer.
Don’t shop for homes months in advance and then apply for pre-approval. You risk the letter expiring before you find a house.
How Long Do Pre-Approvals Last?
The validity period for pre-approvals varies by lender. But most are good for 60 to 90 days.
Here’s why pre-approval letters expire:
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Your finances can change. Income, debts, or credit score may shift over a few months. Lenders want an up-to-date snapshot.
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Underwriting isn’t finalized. Pre-approval only looks at basic qualifications. Final approval requires more scrutiny.
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Rates and guidelines fluctuate. Loan terms approved today may not be offered in the future.
If your pre-approval expires, you’ll have to reapply and submit updated documents. But if your finances are similar, getting re-approved is usually quick.
How Many Pre-Approvals Should You Get?
It’s smart to get pre-approved by 2-3 different lenders. This lets you compare options. Applying multiple times can impact your credit score. But you can minimize this if you complete all the applications within a short window, such as 14 days.
Too many hard inquiries over several months is seen as “shopping around” for credit. This may concern lenders and lower your score.
Steps to Getting Pre-Approved
Follow these key steps:
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Pick lenders. Research and select 2-3 you want to work with. Local banks, credit unions, and online lenders are options.
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Submit your application. This includes personal details, income, debts, the loan amount and home price you need.
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Send documentation. Supply pay stubs, tax returns, bank statements per the lender’s request.
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Get your pre-approval letter. It will detail the mortgage amount, rate, fees, and expiration date.
How Long Does Pre-Approval Take?
Depending on the lender, it may take as little as one business day to get pre-approved. Or it can take a few days to a week for a decision.
With an online lender, the process may be quicker since you can digitally upload documents without visiting a branch.
Factors that can lengthen the pre-approval process include:
- Need for extra verification of income or assets
- Manual underwriting due to complex finances
- Delayed response in submitting all documentation
As long as you provide all required paperwork upfront, most lenders can get you pre-approved within 3-5 days.
Can Pre-Approval Be Extended?
If your pre-approval is about to expire, you can ask your lender about an extension. They may grant an extra 7-30 days.
But extensions aren’t guaranteed. The lender will likely re-evaluate your finances first. Significant changes may mean pre-approval can’t be renewed.
Expect to provide updated documentation like new bank statements and pay stubs. This confirms your situation hasn’t changed.
If an extension isn’t possible, you’ll have to go through the full application process again.
Alternatives When Pre-Approval Expires
If you need more time to find a home, you have options if your pre-approval expires. For example:
Get pre-qualified again. Pre-qualification is less stringent than full pre-approval. It verifies basic details but doesn’t require extensive underwriting.
Ask for a rate lock. This locks in your rate for 30-90 days so it doesn’t rise before you buy. You’ll still need updated pre-approval.
Monitor your credit. Keep your credit score steady. Drastic shifts may impact your next pre-approval.
Look at quicker options. Investigate bridge loans or adjustable-rate mortgages if you need financing fast.
Out-of-Date Pre-Approval When Making an Offer
Say you finally find a home you love, but your pre-approval has expired. Don’t worry! You can still potentially buy the house.
When making the offer, be upfront with the listing agent that your letter has expired. But note you’re already in contact with your lender to get re-approved.
Ask for enough time to get updated pre-approval before the seller reviews offers. That way you can submit the current letter with your bid.
The Bottom Line
Pre-approval is a key part of buying a home. It shows sellers you’re able to get a mortgage and makes for a stronger offer.
The pre-approval process isn’t overly complicated. You provide documents that verify your financial situation. Most lenders can get you pre-approved within a week or less.
The trickiest part is the limited validity period. On average, pre-approvals expire after 60-90 days. So you need some strategy in deciding when to apply.
Monitor your pre-approval timeline when house hunting. If it’s expiring soon, take action early to get re-approved or extend it. With planning, you can keep your pre-approval active as you search for your dream home.
How to Get Preapproved for a Mortgage
The preapproval process is relatively straightforward, and you can usually submit your application online.
Follow these steps to obtain a mortgage preapproval letter:
What Is a Mortgage Preapproval?
A mortgage preapproval is a document from a lender indicating you are conditionally approved for a mortgage loan—up to a specific amount—to buy a house. It usually specifies the type of loan you qualify for and the interest rate the lender would charge you upon completion of a full mortgage application.
Applying for preapproval is essentially the same as applying for a mortgage. Your lender will assess your income, assets, debt and employment history, and review your credit report and credit score. Keep in mind, preapproval should only be viewed as a preliminary document. This means your lender will not fully approve your loan or finalize terms until they verify information about you and any other borrowers on the loan application as well as the property you wish to buy.
A mortgage preapproval letter is valuable because it attests to your ability to follow through on a purchase offer. It can provide a significant advantage in competitive housing markets: When a seller is considering several similar offers for a home, a bidder with preapproved financing may have an edge over others who do not, on the grounds that your ability to secure financing is more certain than that of rival bidders. In hot housing markets, sellers may only consider offers from prospective buyers who are already preapproved for a loan.
How long does my pre-approval last? | Mortgage Mondays #29
FAQ
How long are home loan pre-approvals good for?
Do pre-approvals hurt your credit score?
How many times should I get pre approved for a mortgage?
How often do pre-approvals fall through?
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Loan program and purpose
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Closing rate
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Conventional purchase
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80%
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FHA refinance
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65%
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FHA purchase
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78%
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VA refinance
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72%
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How long does a mortgage pre-approval last?
The time of expiration varies by lender but is typically 30 to 90 days. A mortgage pre-approval demonstrates that you are in a strong financial position to be approved for a specific home loan. Aim to get a mortgage pre-approval letter at the beginning of the homebuying process. What Is a Mortgage Pre-Approval?
Do mortgage pre-approval letters expire?
When you begin shopping for a home, having a mortgage pre-approval letter can demonstrate that you’re a serious buyer. It shows sellers that a lender has determined that you are likely to be approved for a home loan based on your finances. But mortgage pre-approval letters do have an expiration date, which will vary by lender.
Does a mortgage preapproval need to be renewed?
If your home search is outlasting your preapproval window, you can renew your mortgage preapproval with your lender to relieve some pressure. These tips will help you protect your preapproval and stay on top of your homebuying budget.
When should I get a mortgage pre-approval?
You’re safe to get pre-approved as soon as you want to start house hunting, without feeling like you’ll be tied into financing too early. Start your mortgage pre-approval here Table of contents (Skip to section…) Your pre-approval expired.