How Long Does a House Pre-Approval Last?

A house pre-approval is a conditional commitment from a lender, indicating how much money they are willing to lend you for a home purchase. It involves a thorough review of your financial situation, including income, assets, and credit history. This document is a valuable tool in the home-buying process, demonstrating to sellers that you are a serious and qualified buyer and providing a competitive edge, especially in a dynamic housing market.

Understanding Pre-Approval Duration

A mortgage pre-approval typically remains valid for 60 to 90 days, though some lenders may offer 30 or 120-day validities. This limited timeframe is largely due to the fluid nature of personal financial information and market conditions. Lenders base their pre-approval decision on a snapshot of your financial health at a specific moment.

Your income, existing debts, and credit score are all subject to change, directly impacting your borrowing capacity and loan terms. Interest rates can also fluctuate, affecting mortgage affordability. The expiration date ensures the lender’s assessment of your financial profile remains current. If the pre-approval expires, a new evaluation of your finances will be necessary.

Factors Affecting Pre-Approval Validity

Several significant changes to your financial or personal circumstances can invalidate a pre-approval even before its stated expiration date. Acquiring new debt is a common factor; financing a new car, opening new credit card accounts, or making substantial purchases on existing credit can significantly increase your debt-to-income (DTI) ratio. Lenders rely on this ratio to assess your ability to manage monthly payments, and an increased DTI can lead to a reevaluation of your loan terms or even the revocation of the pre-approval.

Changes in employment or income also carry substantial weight. If you switch jobs, especially to a lower-paying role or a position with a probationary period, lenders may view this as an instability risk. Lenders prioritize consistent and verifiable income, so any shift requires them to reassess your repayment capacity. Large, unexplained deposits or withdrawals in your bank accounts can raise concerns for underwriters, as they might suggest undisclosed debts or impact funds reserved for a down payment or closing costs.

A drop in your credit score can also jeopardize your pre-approval. Missing payments on existing loans or credit cards, or applying for new credit that results in multiple hard inquiries, can lower your score and signal financial instability to lenders. Any of these financial shifts necessitate communication with your lender for a re-evaluation, as the pre-approval is conditional on your financial situation remaining stable.

Steps for Pre-Approval Renewal

When a house pre-approval approaches its expiration date or has already expired, the homebuyer must take proactive steps to renew it. The primary action involves contacting your loan officer or lender to inform them of your continued home search and need for an updated pre-approval. This communication is important because an expired pre-approval can cause delays in making offers and may be viewed unfavorably by sellers.

The renewal process typically requires you to provide updated financial documentation. This includes recent pay stubs, updated bank statements, and sometimes recent tax returns. Lenders will also likely conduct another credit check, which is a hard inquiry, to ensure your creditworthiness has not significantly changed. If your financial situation has improved, such as a higher income or reduced debt, you might qualify for better loan terms or a larger loan amount upon renewal.