How Long Does A Pre Approval For A Mortgage Last?

Buying a home is never easy. If you do not have all the cash in hand, which most people usually do not have, you have to look for other alternatives.

Getting a mortgage to buy a home is pretty common. Although it can help make your dreams come true, the actual process can be difficult. And one of the steps include getting pre approved for the mortgage.

If you are planning on buying a home, you should first ponder over how long does a pre approval for a mortgage last. This is important because from getting a lender’s stamp of approval for financing, it could be weeks or even months before you actually buy a house. So will the pre approval still be valid after all this time?

Since lenders know that buying a house can take some time, the pre approval does have a shelf life just not an indefinite one. Even though the length of time can vary, a general pre approval is usually good for about three months. However, what exactly is a mortgage pre approval anyway?

What is a Mortgage Pre Approval?

When purchasing a home, the first time is to prove that you have the financial means to do so. This is where your mortgage pre approval comes in. It is the process by which a mortgage professional such as a broker examines loan applications to determine whether the potential buyers will qualify for a mortgage or not.

Pre approval can also be the key to understanding what exactly your home-buying budget is. You would know what the price range is that you should stick to when shopping for a house since the lender will only let you borrow up to a certain amount.

How Do You Get Pre Approval?

In order to get pre approval, buyers are required to provide a mortgage lender with information such as their employment history, credit score, debts and income. The lender would also want to see bank statements, tax returns and pay stubs during this process. Lenders usually want to protect their interests and make sure that they do not loan money to someone who could be considered high risk. These people are the same who have an inconsistent income, high outstanding debts or a history of late payments. Whereas, you could feel that the entire mortgage pre approval process is invasive.

Once your finances have been reviewed by your lender, you will be given a pre approval letter which will detail a good-faith willingness to extend mortgage financing that is based on its preliminary examination of your assets, creditworthiness and income stream. This letter will also detail the actual loan amount you will qualify for.

If you are wondering, “how any pre approval letters should I get?” it is not something you need to worry about. Getting multiple pre approval letters will not hurt your credit. However, you should get all within two weeks of one another.

How Do You Use Pre Approval?

To solidify your offer on a home, real estate agents will submit a pre approval letter to the seller. This is because most sellers are unlikely to accept an offer unless the buyers can prove that they would obtain a mortgage. A pre approval letter is evidence for the seller that the buyer is not only serious but also has the financial means required to buy the home.

Which is why pre approval is something that is needed at the beginning of your home buying search. It would not make much sense to look for properties if you do not have a pre approval letter in hand with you.

How Long Does a Pre Approval For a Mortgage Last?

Although there is no definitive duration for a pre approval letter to be valid, the custom within the real estate industry says that a pre approval is good for between 90 to 180 days. However, many people can consider it too old after three months.

But why is that so?

Your financial life has the ability to change drastically in three months. You could lose your job, buy a new car or do other things that can end up putting a dent in your home-buying prospects. This is why lenders and sellers are unlikely to trust a pre approval letter that is more than a few months old.

If you want to know how long your pre approval lasts for, you can check this on your letter as it will include the actual time frame. If you are looking for a longer time frame, you can ask for that upfront.

What If Your Pre Approval Expires?

If your pre approval is about to expire, it does not mean you have to apply from scratch again. All you have to do is provide updated financial statements to your lender so that you can prove there has been no change in your debts, income and credit scores for a mortgage pre approval renewal.

Since pre approvals have an indefinite shelf life, it is best to not get pre approved until you are serious about looking for a home. If you are only planning on window shopping, getting a pre approval may not be worth the trouble unless you want to know what you can afford and what is too much for you. If you want to find out a ballpark estimate, you can enter this info into an online pre approval mortgage calculator.

Final Thoughts

So how long does a pre approval for mortgage last depends on your lender. However, for a ballpark duration, three months is a safe option.

If you are serious about buying a home, you should do it within three months of when you got the pre approval for the mortgage. However, if you choose to not do that, all you would have to do is just resubmit your documents and you will be issued another pre approval letter instead of starting from scratch. This will give you a clear budget so you can shop for your home accordingly. If you find a home you like and want to purchase, having a pre approval letter in your hand will be a good start.