A mortgage pre-approval is a written affirmation of how much money you are eligible to borrow in order to purchase a home. Pre-approval can put you ahead of unapproved buyers in a competitive market because it demonstrates that you won’t have any trouble obtaining financing for the amount you’re offering. Pre-approval letters include an expiration date in addition to the type of loan, maximum loan payment, loan interest rate, and estimated monthly payment. Once you’ve been pre-approved, you can confidently begin looking for a new home. We’re here to walk you through the specifics of how long pre-approval lasts and the simple process of what to do when it expires, but what happens if you don’t find the ideal home before it expires?
When does pre-approval expire?
You’ll see a date on your pre-approval letter when you receive it, letting you know it’s only valid for a certain period of time. The exact length of time depends on your situation. Setting a closing date before it expires after your loan officer confirms the length of your pre-approval is important. While you’re still looking for a home, if your pre-approval is about to expire, let your loan officer know right away so you can continue looking with confidence.
What happens if I don’t use my pre-approval?
The average time to find a home is almost five months. The home buying process can be sped up by getting pre-approved by limiting your search to properties in your price range. Pre-approval can also speed up the closing process because it involves submitting a loan application and securing financing. Don’t worry, though, if you don’t use your pre-approval right away. Even though your pre-approval has a deadline, your house-hunting doesn’t. Just let your loan officer know before your pre-approval expires.
What to do if your pre-approval expires
Your credit history, employment, assets, earnings, and debts are examined to determine pre-approval. Be sure to let your loan officer know of any changes that could have an impact on your mortgage application because your financial and employment situation can change over time.
You might need to submit more paperwork if your pre-approval expires, like your most recent bank statements. These records are used to check recent withdrawals and deposits to make sure you have enough money to pay your down payment. You will receive a new pre-approval letter and a new pre-approval with a new expiration date after your information is received and reviewed.
By combining three of our loan programs and services into one, Guild’s creative Homebuyer Protection Package* effectively enables homebuyers to safeguard their earnest money and closing date. Buyers, agents, and sellers have more faith in Guild’s pre-approval process thanks to Credit Approval Protection. We will reimburse the borrower up to $1,000 for costs incurred for inspections, appraisals, and moving should Guild issue a preliminary underwriting credit approval and then be unable to close on the borrower’s loan. Additionally, Guild will compensate the borrower up to $5,000 for any lost earnest money deposits. If delays caused solely by the company prevent the loan from closing on time, in 17 days or more, Guild will reimburse qualifying customers $500 toward closing costs under the Homebuyer Express with 17 Day Closing Guarantee. Include information about this additional protection in your offer letter to strengthen your offer. Last but not least, Guild will use the Lock and Shop Program to 90-dayly lock in the borrower’s interest rate. If rates go up, the borrower’s rate won’t change. The borrower might be qualified for a one-time rate float down option if rates decline.
*Homebuyer Express is not available in Oregon. For full terms and conditions, visit www. guildmortgage. com/cap-hbe-terms/.
The above information is for educational purposes only. Without prior notice, all information, loan programs, and interest rates are subject to change. All loans subject to underwriter approval. Terms and conditions apply. To ensure that you meet all eligibility requirements for tax deductions, always consult a CPA or tax advisor.
FAQ
What happens if mortgage preapproval expires?
Because of this, a preapproval for a mortgage typically lasts 60 to 90 days. When it does, you’ll need to get in touch with your lender once more, bring any updated documentation, and request a new preapproval letter. The good news is that since they already have most of your information on file, this usually doesn’t take too long.
Can you extend pre-approval mortgage?
Preapprovals typically can’t be extended, but they can be renewed. The distinction is that you cannot simply extend your preapproval based on previously provided information; you must have your finances re-verified. The most recent versions of your preapproval documents will be required by many lenders.
Do I have to close before a pre-approval expires?
Before moving forward, you must apply for a new pre-approval letter when your current one expires. Consider whether you want to reapply right away or wait to pay off some debt and accumulate savings for a down payment and closing costs. If you choose to reapply, the procedure is simple.
Does renewing mortgage pre-approval affect credit score?
A mortgage pre-approval affects a home buyer’s credit score. A hard credit inquiry is typically necessary for pre-approval, which lowers a buyer’s credit score by no more than five points.