How Long Is a Preapproval Valid For?

A mortgage pre-approval is a lender’s preliminary assessment of your financial capacity to borrow for a home. It involves reviewing your financial profile, including income, assets, and credit history, to estimate the maximum loan amount you may qualify for. This letter indicates to real estate agents and sellers that you are a serious and qualified buyer.

Typical Pre-Approval Validity

A mortgage pre-approval remains valid for 60 to 90 days. This duration is a common industry standard, though it can vary slightly among lenders. These timeframes account for the dynamic nature of financial markets and a borrower’s personal financial situation. Lenders need to ensure that the information used to initially qualify you remains current. An extended validity period could expose both the borrower and the lender to increased risks from fluctuating interest rates or changes in the borrower’s financial standing.

Factors Affecting Pre-Approval Validity

Several factors can influence your mortgage pre-approval’s validity, potentially shortening its lifespan or altering its terms. Significant changes in your financial situation are primary concerns for lenders. For instance, a job loss, a change in employment, or taking on new substantial debt (like a car loan or increased credit card balances) can impact your debt-to-income ratio and affect the loan amount you qualify for. A decline in your credit score, perhaps due to missed payments or new credit inquiries, also signals a higher risk to lenders, necessitating a re-evaluation of your pre-approval terms.

Market conditions, particularly fluctuating interest rates, also play a role. Even if your personal finances remain stable, a rise in prevailing interest rates can reduce the loan amount a lender is willing to offer you, as the monthly payment for the same principal amount would increase. Individual lenders may also have specific internal policies regarding re-verification schedules or criteria, which can affect how long your pre-approval remains robust without an update. These changes underscore why a pre-approval is not a final loan commitment but rather a snapshot of your financial standing at a specific point in time.

Steps When Pre-Approval Nears Expiration

As your mortgage pre-approval nears or reaches expiration, proactively contact your lender. This allows you to discuss extending or renewing your pre-approval. Often, this involves the lender re-verifying your current financial information to ensure nothing has significantly changed since the initial assessment.

Be prepared to provide updated documentation, including recent pay stubs, bank statements, and tax forms. The lender will review these documents to confirm your income, assets, and debt obligations are still within acceptable parameters. A new credit check, known as a hard inquiry, will likely be performed, which can temporarily reduce your credit score by a few points. Upon review, the lender will either issue a new pre-approval letter with updated terms, if necessary, or confirm the continued validity of your previous approval. Maintaining an active pre-approval throughout your home search process ensures you remain a competitive and credible buyer.