If you want to show sellers you’re seriously interested in buying their home, getting mortgage pre-approval is a critical first step. It proves that, after digging through your financials, a lender is willing to give you money to buy a house.
“Getting pre-approved is a great way to differentiate yourself when making an offer,” says Linda Walters, a Realtor® in Wayne, PA.
Unfortunately, a pre-approval isn’t a one-and-done process. In fact, if your home search drags on for several months, there’s a chance your pre-approval won’t be valid after a certain point. Let’s explore how long a pre-approval letter remains valid and what to do if yours expires before you find a house.
Pre-approval vs. pre-qualification
It’s important to understand that pre-approval is different from pre-qualification.
To get pre-approval, the lender will review your financial information such as bank statements, pay stubs, W-2s or 1099s, a year or two of your tax returns, and your credit report. Once the numbers are crunched, the lender will provide you with a pre-approval letter certifying you are qualified to borrow a certain amount of money at a certain interest rate. Pre-approval does not lock you into a deal with a lender; in fact, it’s wise to speak to a couple of lenders before signing a mortgage.
On the flip side, getting pre-qualified for a loan is much less of a financial deep-dive. The lender simply estimates what you’d probably qualify for based on information you provide about your income, debts, and assets. It’s good information to have if you’re not sure you can get a mortgage, but it doesn’t mean as much to sellers as pre-approval does.
Why mortgage pre-approval matters
“If you want to purchase a home, you will have to demonstrate that you are financially able to buy it,” says Cathy Baumbusch, a Realtor in Alexandria, VA. “It doesn’t make sense to look for properties to purchase without first knowing what price range you qualify for and are able to purchase,” she says.
If you are in a competitive market, a pre-approval letter is often needed for your offer to be taken seriously.
How long does your mortgage pre-approval last?
It varies from lender to lender, but mortgage pre-approval is typically valid for about 90 days, according to Baumbusch. Your letter will have a date on it, after which it is no longer valid.
The reason pre-approval letters “expire” is because banks need the most up-to-date information about your salary, assets, and debts. Three months is long enough that you could have left a job, taken on new debts, or spent what was previously in your bank account.
In fact, even if you’re pre-approved, most lenders will want an updated set of pay stubs and bank statements around the time of closing. Hey, nobody ever said getting a mortgage was easy!
What do you do if your mortgage pre-approval has expired?
If you’re still house hunting past the expiration date on your pre-approval letter, you just need to get another one. If you go to the same lender, it “can be updated by reverification of your financial documents,” says Sheree Landerman, a Realtor in Farmington, CT.
You will need to provide updated pay stubs and bank statements, but if nothing major has changed in your financial world, it should be no problem to get a fresh pre-approval letter from your lender.
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