How Long Is a Pre-Approval Good For When Applying for a Mortgage?

Getting pre-approved for a mortgage is a key step in the homebuying process. It helps buyers understand their borrowing power and reassures sellers of their financial readiness. However, pre-approvals have a limited lifespan, and buyers must be aware of when they expire and how financial or market changes can impact their status.

Typical Validity Period

A mortgage pre-approval typically lasts 60 to 90 days, though the exact timeframe varies by lender. This period reflects how quickly financial conditions can shift, affecting both borrowers and the broader economy. Interest rates fluctuate, housing prices change, and a buyer’s financial profile may evolve, all of which influence loan eligibility.

Pre-approvals rely on documents like pay stubs, bank statements, and credit reports, which provide a snapshot of a borrower’s financial standing. If too much time passes, lenders require updated records to verify that the borrower’s situation remains stable. Buyers who don’t finalize a home purchase before their pre-approval expires may need to resubmit these documents.

Impact of Financial Changes

A borrower’s financial situation plays a critical role in maintaining pre-approval. Lenders evaluate income stability, debt levels, and creditworthiness, and any major changes can affect loan eligibility.

Employment Changes

Lenders prioritize consistent income when reviewing mortgage applications. A job change, especially one involving a different industry, a shift to commission-based pay, or reduced hours, can raise concerns. If a borrower moves to a higher-paying position in the same field, it may not negatively impact approval, but switching to self-employment or contract work can introduce uncertainty.

Self-employed borrowers typically need at least two years of stable income history, as outlined in Fannie Mae’s Selling Guide. If a borrower transitions to self-employment after pre-approval, they may need to provide additional documentation, such as profit-and-loss statements or tax returns. Even a temporary employment gap can be problematic, as lenders often require a new verification of employment before finalizing the loan.

Credit Score Adjustments

A borrower’s credit score directly influences mortgage approval and interest rates. If a score drops after pre-approval, the lender may reconsider the loan terms or revoke the offer. Late payments, new credit inquiries, or increased credit utilization can contribute to a lower score.

For example, a borrower with a 740 credit score may qualify for a 6.5% interest rate, while a drop to 680 could raise the rate to 7.0%, increasing monthly payments. Since lenders typically recheck credit before closing, maintaining good credit habits is essential.

Debt Accumulation

New debt can alter a borrower’s debt-to-income (DTI) ratio, which lenders use to assess affordability. The Consumer Financial Protection Bureau (CFPB) notes that most lenders prefer a DTI below 43%, though some allow higher ratios with compensating factors.

For instance, a borrower with a $5,000 monthly income and $1,500 in existing debt payments has a 30% DTI. If they finance a car with a $500 monthly payment, their DTI rises to 40%, potentially affecting loan approval. Lenders reassess financial obligations before closing, and a higher DTI may lead to a reduced loan amount or denial. Avoiding major purchases or new credit accounts helps maintain pre-approval status.

Lender Guidelines

Financial institutions set mortgage pre-approval criteria to minimize risk. While industry-wide standards exist, individual lenders may have unique policies that influence the process.

One key factor is liquid asset reserves. Beyond the down payment and closing costs, many lenders require borrowers to have additional funds to cover several months of mortgage payments. Conventional loans often require at least two months’ worth of reserves, while jumbo loans may require six months or more. A significant drop in savings after pre-approval could raise concerns about financial stability.

Lenders also scrutinize large, unexplained deposits. If a borrower suddenly deposits $20,000 without a clear source, the lender may request documentation to verify its origin. Funds that cannot be sourced may be excluded from the borrower’s available assets, affecting loan approval.

Certain property types, such as condominiums or multi-unit homes, may have additional lender requirements. For example, condo purchases often require a financial review of the homeowners association (HOA). If an HOA has a high delinquency rate on dues or insufficient reserves, the lender may decline financing, even if the borrower qualifies otherwise. Buyers considering these properties should check lender requirements early to avoid obstacles.

Possible Renewal Steps

If a mortgage pre-approval nears expiration and a borrower has not yet secured a property, they may need to renew it. This often involves resubmitting updated documents, including recent pay stubs, bank statements, and tax returns. Having these materials ready can help streamline the process.

Market conditions can also influence renewal terms. If interest rates have risen, the updated loan estimate may reflect higher borrowing costs, affecting affordability. Some borrowers choose to lock in a rate if they anticipate further increases, though this typically requires a property under contract. Lending criteria may also shift based on economic factors, with some institutions tightening requirements during financial uncertainty. Staying informed about evolving guidelines helps borrowers adjust accordingly.

Consequences of Expiration

If a mortgage pre-approval expires before a borrower finalizes a home purchase, it can delay or jeopardize the transaction. Since pre-approvals are based on a snapshot of financial conditions, an expired pre-approval requires a fresh evaluation.

One immediate consequence is the potential for altered loan terms. If interest rates have increased, a borrower’s purchasing power may decrease, leading to higher monthly payments or a lower approved loan amount. Changes in lending regulations or underwriting standards can also create new hurdles. For example, if a lender tightens DTI ratio requirements, a borrower who previously qualified may no longer meet the updated criteria.

An expired pre-approval can also weaken a buyer’s negotiating position. Sellers and real estate agents often prefer offers from buyers with active pre-approvals, as it signals financial readiness. If a pre-approval lapses during negotiations, a seller may favor another offer. To avoid setbacks, buyers should track their pre-approval expiration date and renew it in advance if needed.