How Long Is a Mortgage Pre-Approval Good For?

A mortgage pre-approval is a lender’s conditional commitment to provide you with a home loan, based on an initial review of your financial standing. This formal assessment involves a thorough examination of your credit history through a hard credit pull and verification of various financial documents. It helps you understand the maximum loan amount you may qualify for, which aids in setting a realistic home-buying budget. It also signals to sellers that you are a serious and financially capable buyer, enhancing the credibility of any offer you make.

Standard Pre-Approval Validity Period

A mortgage pre-approval typically remains valid for 60 to 90 days. This common duration is established by most lenders to account for the dynamic nature of financial markets and personal circumstances. Fluctuating interest rates can impact loan terms, and lenders require current financial information to assess eligibility. Within this 60- to 90-day window, your income, credit score, and debt levels are expected to remain consistent. While this timeframe is standard, some lenders might offer pre-approvals for as short as 30 days or up to 120 days.

Factors Affecting Pre-Approval Validity

Several significant changes in your financial situation can impact the continued validity of a mortgage pre-approval, even before its stated expiration. A job loss or a change in employment can undermine income stability. Taking on new debt, such as a car loan, increasing credit card balances, or acquiring new student loans, can alter your debt-to-income ratio, which is a key metric lenders use to determine repayment capacity. Significant changes to your credit score, like missed payments or new delinquencies, can negatively affect your pre-approval. Large, unexplained deposits or withdrawals from your bank accounts can also raise concerns, and external factors like major shifts in market interest rates or changes in lending guidelines can also necessitate a re-evaluation of your pre-approval terms.

Renewing or Reapplying for Pre-Approval

If your mortgage pre-approval is nearing its expiration date, or has already expired, contact your lender promptly. The renewal process often involves updating your financial documentation, including recent pay stubs, bank statements, and potentially tax returns. Lenders will confirm that no significant financial changes have occurred since the initial approval, and a new credit check may also be part of the renewal. If a substantial amount of time has passed, or if major financial changes have taken place, the lender may require a full reapplication. Maintaining an active pre-approval throughout your home search is beneficial, as it ensures you are prepared to make a competitive offer when you find a suitable property.

Distinction Between Pre-Approval and Pre-Qualification

Understanding the difference between a mortgage pre-approval and a pre-qualification is important. Pre-qualification is a preliminary estimate of how much you might be able to borrow, based on unverified information. This process does not involve a hard credit check, offering a general idea of affordability. In contrast, a mortgage pre-approval is a more thorough process. It requires verification of your financial documents, such as income, assets, and debts, and includes a hard inquiry into your credit report. This results in a conditional commitment from the lender, providing a more reliable indication of your borrowing capacity. While pre-qualification offers a rough estimate, a pre-approval carries more weight with sellers and real estate agents, as it demonstrates a verified ability to secure financing.