How Long Is A Pre-Qualified Loan Good For?

Getting pre-qualified for a mortgage is an important first step when buying a home. It gives you an estimate of the loan amount you may qualify for. But pre-qualifications are only valid for a limited period. Typically, a pre-qualification letter will last 30-90 days. Here is a detailed look at pre-qualifications and how long they are good for.

What is a Pre-Qualification?

When you start the homebuying process, you’ll want to get pre-qualified by a lender Pre-qualification is when a lender makes a preliminary assessment of your finances to estimate the mortgage amount you may qualify for

To get pre-qualified, you provide information about your income, debts, assets, and downpayment funds. The lender analyzes this data to determine the loan types and amounts you’re likely to be approved for.

Pre-qualification is based on limited documentation. The lender may only verify some of your claims or rely on your statements. They do not do a comprehensive review as they would for final mortgage approval.

Why Get Pre-Qualified?

Here are some key reasons to get pre-qualified before house hunting

• Gives you an estimate of your price range and loan amount. This helps narrow your home search.

• Helps you understand if you need to make financial improvements to qualify for a mortgage. For example, you may need to pay down debts or increase your credit score.

• Shows sellers you are a serious buyer who has done due diligence. A pre-qualification letter carries some weight when making an offer.

• Starts the relationship with the lender. The rest of the approval process will go quicker since they already have your initial paperwork.

• Lets you compare mortgage offers from different lenders. You can get pre-qualified by multiple lenders to find your best options.

How Does Pre-Qualification Differ From Pre-Approval?

Pre-qualification is different from pre-approval. With pre-approval, the lender does a comprehensive analysis of your finances, including verifying your claims. This is based on extensive documentation you provide.

Pre-approvals go through underwriting steps that are close to the final mortgage approval process. So there is more certainty that you will qualify for the specified loan amount.

When To Get Pre-Qualified

The ideal time to get pre-qualified is when you are ready to actively start house hunting. You don’t want to get pre-qualified too early, or you risk the pre-qualification expiring before you find a home.

As a general rule, get pre-qualified 1-2 months before you want to start seriously looking at homes and making offers. This fits well with the 30-90 day validity window that most lenders allow.

How Long Are Pre-Qualifications Valid?

Most lenders consider pre-qualification letters valid for 30-90 days. Some may allow a shorter or longer time frame such as 15-120 days.

Here are some factors that determine how long a pre-qualification is valid for:

Lender policy: Each lender sets their own expiration policy. So the same financial details could lead to different validity periods from different lenders.

Your situation: Applicants with stellar credit and finances may get a longer validity period than those with weaker finances and lower scores.

Underwriter’s judgment: The loan officer reviewing your application may decide your situation warrants a shorter expiration than normal policy.

Timing of home search: If you state you won’t start seriously looking for 3-4 months, they may give a shorter validity window.

Change in circumstances: Major changes like a job loss can instantly invalidate a pre-qualification.

Why Do Pre-Qualifications Expire?

There are good reasons why lenders put an expiration date on pre-qualifications:

• Only limited documentation is required for pre-qualification. Your finances may look different once full documentation is provided.

• Income sources, debts, and credit history can change quickly over 1-3 months. This could alter your mortgage eligibility.

• Life events like a job change, pregnancy, or home purchase can rapidly change your financial standing.

• Interest rates and lender programs fluctuate frequently. After 30-90 days, your rate and options may differ.

• Lenders want a current assessment before issuing final approval when you have an offer.

What Happens When A Pre-Qualification Expires?

If your pre-qualification letter has expired, don’t worry. You will simply have to go through the process again to get a new letter.

In many cases, you can get pre-qualified again with the same lender. They will want updated details on your situation and new documentation. This new pre-qualification will have its own 30-90 day validity window.

Some lenders will even let you simply recertify or confirm your previous application details instead of a full pre-qualification process. This makes it easier to get a refreshed pre-qualification letter.

Tips For Getting The Longest Validity Period

Here are some tips that may help you get a longer pre-qualification validity timeframe when applying:

• Provide as much documentation upfront as you can. This gives the lender more certainty about your finances.

• Have strong credit scores above 700. Higher scores often equate to longer validity periods.

• Keep debt levels low. High debts usually lead to shorter pre-qualification expiration dates.

• Explain large deposits or anomalies in bank statements. This prevents underwriting questions later.

• Only apply when you plan to buy soon. Saying you won’t search seriously for 4-5 months may get a shorter window.

• Ask the lender about their policies. Some firms may be willing to provide longer validity periods.

Alternatives If Your Pre-qualification Expires

Here are a few options if your pre-qualification expires before you are ready to make an offer:

• Reapply with the same lender. See if they can quickly re-pre-qualify you by confirming old details. This may yield the same terms.

• Shop around again. Look at a few lenders to compare offers and lock in the best rates and terms this time.

• Get pre-approved. Move up to a more rigorous pre-approval process for greater certainty. But beware of too many hard credit checks.

• Request recertification. Ask the lender to revalidate your prior pre-qualification by confirming your situation is unchanged.

• Bridge the gap. If it will just be a week or two before you make an offer, ask for a short validity extension.

The Bottom Line

Pre-qualification provides an estimate of your mortgage eligibility. But most pre-qualifications expire after 30-90 days. Be prepared to reapply if you don’t find a home within that window. Actively house hunt during the validity period. Or move up to a more certain pre-approval letter when you are ready to make an offer. With a bit of planning, you can make sure your mortgage pre-qualification status remains fresh throughout your home search.