How Long Are Pre-Approved Mortgages Good For?

A mortgage pre-approval is a conditional commitment from a lender, indicating how much they are willing to lend you for a home purchase. It is based on a preliminary review of your financial information, including income, assets, and a credit check. This differs from pre-qualification, a less formal estimate based on self-reported data without a credit inquiry. Obtaining a pre-approval provides a realistic budget for your home search and demonstrates to sellers and real estate agents that you are a serious and qualified buyer, strengthening your offer.

Understanding the Validity Period

Mortgage pre-approvals are not indefinite; they typically come with a defined expiration date. Most pre-approval letters are valid for 60 to 90 days. Some lenders may issue letters with shorter limits, such as 30 days, while others might extend it to 120 days. The exact expiration date is clearly stated on the pre-approval letter, and it is important for homebuyers to note.

Lenders impose these time limits because financial landscapes are dynamic. Interest rates can fluctuate, and a borrower’s financial situation can change significantly within a few months. The initial assessment relies on current financial data and a recent credit report, which has a limited shelf-life. This expiration ensures that when you are ready to finalize a loan, the lender has the most current and accurate picture of your financial health and prevailing market conditions.

Influencing Factors on Duration

Several factors can impact the effective life of a pre-approval, potentially requiring an update even before its stated expiration. A primary reason is the limited validity of the credit report used during the initial assessment. While pre-approvals are often good for 60 to 90 days, the underlying credit report might be valid for up to 120 days for some lenders. If the home search extends beyond this period, a new credit pull may become necessary.

Significant changes in a borrower’s financial situation can also necessitate a re-evaluation or invalidate a pre-approval. This includes job loss, a change in income, or taking on new debt like a car loan or increased credit card balances. Making large purchases or experiencing substantial changes in assets could also affect your eligibility. Lenders need to verify that your income and debt-to-income ratio still align with the original approval.

Market interest rate fluctuations are another influencing factor. Substantial shifts in the broader interest rate environment can impact the loan amount or terms originally pre-approved. Lenders may need to adjust the pre-approval to reflect current market conditions, as a higher rate could reduce the amount you qualify for. Different lenders may also have varied validity periods or internal policies that influence how quickly an update might be required.

Renewing an Expired Pre-Approval

When a mortgage pre-approval expires or nears expiration, contact the original lender. It is typically not a full re-application, but an update process to confirm your current financial standing. This update usually involves providing recent financial documents.

You will likely need to supply updated pay stubs to verify current income, along with recent bank statements to show asset levels. The lender will also perform an updated credit check to assess your current credit score and history. This re-verification ensures that your financial profile continues to meet the lender’s criteria for the loan.

Based on this updated financial information and prevailing market conditions, the renewed pre-approval might come with different interest rates or a revised loan amount compared to the original. Maintaining financial stability throughout the home-buying process, by avoiding major new debts or significant changes to employment, can help facilitate a smoother renewal process.