How Long Does a Mortgage Pre-Approval Last?

Your dream home won't wait, so make sure you're ready to jump on it by having a pre-approval letter from a reputable mortgage lender. But, pre-approval letters don't last forever, so if you're taking your time house hunting, be aware you may need to renew yours.

What Is a Mortgage Pre-approval Letter?

A mortgage pre-approval letter is what you'll receive after completing a mortgage pre-approval. This is where a lender evaluates your eligibility for a home loan. It's an important part of the home buying process and will help you determine what you can afford. The amount you are pre-approved for will be based on your financial situation and credit history. Your lender will take a close look at your finances and verify all your information. You may be asked to submit pay stubs, W-2s, bank statements, and other financial documents. Your lender will also pull your credit report to do a credit check and review your credit score.

After reviewing your information, your lender will pre-approve you for a specific mortgage loan amount and give you your interest rate. This is when you'll receive your mortgage pre-approval letter. This letter will show the amount you are preapproved for, and it will help you determine what your monthly payment could look like. Your lender will go over different loan programs with you to help determine the best home loan for your needs.

Once you have your pre-approval letter, you should share it with your real estate agent so they can help you find a home in your price range. Your Realtor will submit your pre-approval letter along with your offer to show sellers that you are a serious and qualified buyer.

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Mortgage Pre-approval vs. Pre-qualification

Pre-approval and pre-qualification both refer to the steps a lender takes to determine how much you might be able to borrow, but they are not one and the same.

Pre-qualification is based on estimates you provide for your creditworthiness, while a pre-approval goes beyond estimates. To get pre-qualified, you'll provide information about your credit score, the purchase price of the home, employment history, down payment amount, and your monthly debts. This will give your lender a ballpark idea of how much you'll be able to borrow without digging too deeply into your financial situation.

With a pre-approval, you'll provide documentation like pay stubs and tax returns, as well as complete a hard inquiry credit check. Your lender will take a deep dive into your full financial picture, including understanding your monthly income (like your salary or investment property income) and monthly debts (like credit card debt, car payments, and student loans). Your debt-to-income ratio (DTI) will be determined, which calculates your overall debts compared to your overall income. The preapproval process has more steps than the pre-qualification process, but a pre-approval can help you stand out more during your home search.

How Long Does a Pre-approval Last?

A mortgage pre-approval won't last forever. Typically, they have an expiration date of around 60-90 days to ensure your financial information is accurate. Lenders want to be sure that you haven't had any major financial changes. For example, you could lose your job or an emergency could take a big bite out of your savings.

If your pre-approval expires, you'll have to go through the pre-approval process again with updated financial documents.

Get Pre-approved When You're Ready to Shop

Ready to take the plunge into home ownership? Take the first step toward purchasing your new home by getting a pre-approval from Found It. Talk with one of our knowledgeable loan officers to get started on your pre-approval.