How Long Is a Pre-Approval Letter Good For?

A mortgage pre-approval letter serves as a conditional commitment from a lender, indicating their willingness to finance a home purchase up to a specified amount. This document clarifies your borrowing capacity and home-buying budget. It demonstrates to real estate agents and sellers that you are a serious and qualified buyer, which can be a significant advantage in a competitive housing market. While it signifies a lender’s initial assessment of your financial health, it is not a final loan approval.

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 shorter validity periods, occasionally as brief as 30 days, depending on their internal policies and current market conditions. The exact expiration date will be stated on the pre-approval letter. Lenders implement these expiration dates because financial situations and market conditions, such as interest rates, can change rapidly.

Reasons for Expiration

A pre-approval letter has a limited lifespan because financial standing or the lending environment can change, making the initial assessment outdated. Significant changes in your personal financial situation are primary reasons for expiration. For instance, a decrease in income due to job loss or a new position with lower pay can impact your debt-to-income ratio and affordability. Similarly, taking on new debt, such as a car loan, increased credit card balances, or additional student loans, can alter your financial obligations and reduce the amount a lender is willing to offer.

Large purchases that deplete savings or negatively affect your credit can also lead to pre-approval expiration. Your credit score is dynamic; late payments, new credit inquiries, or high credit utilization can cause it to drop, affecting your eligibility or loan terms. Beyond personal finances, external factors also play a role in pre-approval expiration. Fluctuations in interest rates, particularly a significant rise, can impact the affordability of the previously approved loan amount. Additionally, changes in lending guidelines or broader market conditions can necessitate a re-evaluation of your pre-approval.

Renewing Your Pre-Approval

When your pre-approval letter approaches its expiration date or has already expired, renewing it is often straightforward, especially if your financial circumstances remain largely unchanged. Contact your original lender to initiate the renewal. They will guide you through their renewal procedure, which typically requires updated financial documentation.

You will likely need to supply recent pay stubs, bank statements, and updated tax returns to verify your income, assets, and financial stability. As part of the renewal, lenders usually perform a new credit pull to assess your creditworthiness. While this results in another hard inquiry on your credit report, multiple inquiries for a mortgage within a short period are often treated as a single inquiry by credit scoring models, minimizing the impact on your score. Should significant financial changes have occurred, the lender will re-evaluate your eligibility based on this new information, which could lead to an updated pre-approved amount or altered terms.