How Long Is a Mortgage Pre-Approval Letter Good For?

A mortgage pre-approval letter serves as a formal indication from a lender that you meet the financial criteria to borrow a specific amount for a home purchase. It is not a commitment to lend, but rather a conditional approval based on a review of your financial standing. The primary purpose of this document is to demonstrate your purchasing power to real estate agents and home sellers, signaling that you are a serious and qualified buyer. This validation provides a clear understanding of your potential budget, which can streamline your home search.

Typical Validity Period

A mortgage pre-approval letter typically remains valid for a period ranging from 60 to 90 days. Some lenders might issue letters with validity periods as short as 30 days, while others may extend them up to 120 days. Lenders base their offers on recent income, credit history, and prevailing interest rates, which can fluctuate over time. Always check the specific expiration date printed on your pre-approval letter.

Factors Affecting Validity

The continued validity of a mortgage pre-approval is contingent upon your financial situation remaining stable and market conditions not undergoing significant shifts. Lenders assess several key elements when issuing a pre-approval, including your income, existing debts, and credit score. Any substantial changes to these factors can impact the pre-approval’s terms or even its continued effectiveness. For instance, a job loss, a significant reduction in income, or taking on new debt such as a car loan or increased credit card balances could alter your debt-to-income ratio, potentially affecting the approved loan amount. A notable decrease in your credit score due to missed payments or new credit inquiries might lead the lender to re-evaluate your eligibility or the interest rate offered.

Beyond personal financial circumstances, broader market conditions, particularly changes in interest rates, can also influence a pre-approval. A significant rise in rates, for example, might reduce the amount a lender is willing to finance under the original terms, even if your personal finances remain unchanged.

Renewing or Reapplying

When a mortgage pre-approval letter approaches or passes its expiration date, you will generally need to engage with your lender to renew or reapply. Renewing often involves providing updated financial documentation to the lender, such as recent pay stubs, bank statements, and potentially updated tax returns or W-2 forms. The lender will typically conduct another credit check to ensure your creditworthiness has not changed significantly since the initial approval.

In situations where a considerable amount of time has passed, or if your financial circumstances have undergone substantial changes, a full reapplication might be necessary instead of a simple renewal. Having an active pre-approval throughout your home search is important. It signals your readiness to make an offer and helps you navigate the competitive housing market with confidence.