How Long Does a Mortgage Pre-Approval Last?

Pre-approvals play a key role in homebuying

Fact checked by Betsy PetrickFact checked by Betsy Petrick

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. Generally, they last from 30 to 90 days. Learn how mortgage pre-approvals work, how to get one, and why they are a key part of homebuying.

Key Takeaways

• Mortgage pre-approval letters are only valid for a limited time.
• 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?

A mortgage pre-approval is a letter from a financial institution that states you are likely to meet the requirements to be approved for a home loan. It will specify the amount of mortgage and loan type you can qualify for based on your current financial and credit situation. It will also have an expiration date.

The length of time a mortgage pre-approval letter is active will vary by lender but is typically 30 to 90 days. 

To get a pre-approval letter, you fill out a mortgage application, provide documentation, and give the lender permission to check your credit. However, a pre-approval is not a guarantee that you will be approved for the loan. Full loan approval will require more in-depth underwriting, including title research on the home you plan to purchase. 

Pre-Approval vs. Pre-Qualification 

The length of a pre-approval term can vary depending on the lender. Lenders may use the terms “pre-qualification” and “pre-approval” interchangeably.

Note

In some cases, a pre-qualification may be a separate, less rigorous version of a pre-approval that the lenders base on information from credit bureaus. A pre-qualification may not have verification or a hard credit check or require the amount of documentation that pre-approvals do. 

When to Get a Pre-Approval and How to Get One

You may start the homebuying process by browsing real estate listings. Once you’re serious about buying a home, you should do a deep dive into your finances. You’ll need to understand how much you can afford and how much you can borrow.

Getting a pre-approval from a lender can give you some key information. With it, you can begin a more targeted home search. You can also better understand any potential weak spots in your finances so you can make improvements, such as raising your credit score.

To get pre-approved, follow these steps:

• Find a lender you’d like to work with and fill out a loan application. This will require submitting basic contact information and answering questions about your income and debts.
• Gather your documents. To be pre-approved for a mortgage, you may need to share documents related to your income, assets, credit score, and employment history. This may include pay stubs, W-2s, bank statements, and tax returns. If applying online, you can usually upload digital files of these documents. 
• Wait for the lender’s decision. Depending on the institution, you might be able to get a decision on the spot or it could take a couple of business days. If you qualify for a loan product, you will receive a pre-approval letter that specifies the maximum loan amount you can get. 

How Long Does a Pre-Approval Last?

In general, pre-approval letters are valid for 30 to 90 days. Lenders put an expiration on them because they are based on your financial situation at a moment in time. Lenders know that your situation can change over the course of a few months, such as if you lose a job or if you get another loan. So, they put a time limit on the pre-approval. 

If your pre-approval letter expires while you are still house-hunting, you can return to the lender for a new one. You will likely have to share recent documentation to show that your financial situation hasn’t changed.

Do Mortgage Pre-Approvals Expire?

Yes, mortgage pre-approvals expire, typically after 30 to 90 days. The expiration date will appear in your pre-approval letter. When your pre-approval letter is no longer valid, you will have to get a new one.

Does a Pre-Approval Hurt Your Credit?

Pre-approvals usually require a hard pull of your credit reports by the lender. The mortgage company or bank will ask you to authorize a credit check. Anytime there is a hard inquiry, such as when you apply for a new credit card or get an insurance rate quote, your credit score will drop slightly. However, the drop is temporary, and within a few months, your score will usually recover.

What Happens If I Don’t Use My Pre-Approval?

There are no consequences if you decide not to use your pre-approval. A pre-approval is simply meant to show that you meet the basic financial requirements of a qualified borrower. It doesn’t mean that you are committed to borrowing from that particular lender once you’re ready to move forward.

How Far in Advance Should I Get Pre-Approved for a Mortgage?

Before you do serious house-hunting, it’s a good idea to get a mortgage pre-approval. That will help you understand the price range of homes you can get a loan for. It will show sellers that you are able to get financing, making it more likely that they will entertain an offer from you. Keep in mind that pre-approvals do expire. 

The Bottom Line

A mortgage pre-approval is an important step in the home-buying process. It indicates that you are likely to secure financing because you meet a lender’s preliminary qualifications. Consider getting a pre-approval letter about a week or two before you look at homes. That way you’ll have it ready if you find a home you like, and you’ll have ample time to shop around.

Read the original article on Investopedia.