How Long Does a Mortgage Pre-Approval Last?

A mortgage pre-approval serves as a preliminary assessment from a lender, indicating the amount they are tentatively willing to lend for a home purchase. It provides a clear understanding of borrowing capacity before actively searching for a property. It also signals to sellers that a buyer has undergone a financial review and is a serious candidate. However, a pre-approval is not a final loan commitment and has a temporary validity period.

Understanding Pre-Approval and Pre-Qualification

Prospective homebuyers should understand the distinction between pre-qualification and pre-approval. Pre-qualification offers a general estimate of what a borrower might afford, based on self-reported financial information like income and existing debts. This quick process typically does not involve a detailed credit check, serving as a preliminary step to gauge affordability.

In contrast, mortgage pre-approval involves a more thorough review of a borrower’s financial health. It requires submitting documentation like pay stubs, W-2 forms, tax returns, and bank statements for verification. Lenders also conduct a “hard inquiry” on the borrower’s credit report, which can cause a small, temporary dip in the credit score. A pre-approval provides a conditional commitment for a specific loan amount and terms. It carries more weight with sellers and real estate agents due to its robust financial vetting.

Typical Pre-Approval Duration

A mortgage pre-approval has a specified expiration date. Most pre-approvals are valid for 60 to 90 days, though some lenders may issue letters with shorter terms, such as 30 days.

This time limit exists because a borrower’s financial situation and market conditions can change significantly. Lenders ensure assessed financial information, including income, debts, and credit score, remains current and accurate. For example, increased debt or decreased income could alter eligibility or loan terms. Renewing a pre-approval helps lenders account for these shifts and maintain lending integrity.

Factors Influencing Pre-Approval Validity

Several factors can impact a pre-approval’s validity, potentially causing it to expire sooner or require re-evaluation. Significant changes in a borrower’s financial situation are a primary concern. This includes job loss or substantial income reduction, directly affecting debt-to-income ratio and repayment capacity. Similarly, taking on new debts, like a car loan or high credit card balances, increases financial obligations and can alter the approved loan amount.

New credit inquiries or a drop in credit score due to missed payments can negatively affect a pre-approval, as lenders rely on a consistent credit profile. External factors, such as shifts in interest rates or changes in lending guidelines, can influence a pre-approval’s terms or validity, even if the borrower’s financial situation remains stable. Lenders assess these elements to ensure the initial conditional commitment remains appropriate.

Actions When Pre-Approval Expires

When a mortgage pre-approval expires, it typically requires reapplication rather than a simple extension. The first step involves contacting the original lender to discuss renewal and understand their specific requirements. Borrowers must submit updated financial documents, including recent pay stubs, bank statements, and updated tax returns, to reflect their current financial status.

The lender will re-evaluate the borrower’s financial profile, which may involve another credit pull to ensure continued eligibility and assess changes in creditworthiness. While reapplication can cause delays in the homebuying timeline, especially if an offer is pending, it is a necessary step to maintain borrowing power and assure sellers of serious intent. In some cases, if financial circumstances have improved, reapplication might result in more favorable loan terms or a higher approved amount.