How long does a mortgage preapproval last?
Typically, your preapproval will last between 60 and 90 days
When it’s time to make daydreaming about a new home a reality, the first step is to get a mortgage preapproval from your lender or bank. While not a guarantee, a preapproval is as close as you can get to confirming your creditworthiness before you start the official mortgage process.
Here’s how long preapprovals last, when you should apply for one and what to do if yours expires.
Key insights
- A mortgage preapproval shows sellers you are serious about buying a home and you have a lender’s initial green light.
- Typically, mortgage preapproval letters are good for 90 days, but some lenders might limit approval to 30 or 60 days.
- If your mortgage preapproval letter expires, you can get a new one from your lender as long as nothing has significantly changed with your finances.
What is a mortgage preapproval letter?
A mortgage preapproval letter is a document from a lender that indicates how much money it is willing to lend you to buy a home, based on a preliminary review of your credit and financial information.
This document typically includes the preapproved loan amount, the loan type and the terms. It tells your real estate agent and a seller that you are a serious buyer who is qualified to purchase the property.
However, it is not a final guarantee of a loan. To successfully receive a loan, you will need to undergo a stringent underwriting process, and the property will need to be inspected and appraised.
When should I get a mortgage preapproval letter?
Ideally, you want to get a mortgage preapproval letter when you are serious about shopping for homes.
"The best time to get a preapproval was the day you knew you wanted to buy a home. The second-best is right now,” said Dan Green, CEO of Homebuyer.com. “Preapprovals are dress rehearsals for your eventual home purchase. If something goes wrong, you need to know about it."
Before getting a preapproval letter, you want to allow yourself time to have your finances and creditworthiness in the best shape possible. This may include paying down debts, improving your credit score or saving for a larger down payment. These factors can significantly affect your preapproval amount, interest rate and purchasing power.
Obtaining a preapproval letter too soon might result in it expiring before you find the right home.
How long are mortgage preapproval letters good for?
A mortgage preapproval typically lasts between 60 and 90 days. The exact length will depend on the lender and its specific policies — some lenders might limit the approval period to 30 days.
This time frame ensures that your financial situation and the housing market conditions don't change dramatically from the time you get preapproved until you find a home to purchase.
What happens when a mortgage preapproval letter expires?
If your mortgage preapproval expires before you've found a home, you'll need to connect with your lender again. Many times, if your financial situation and the housing market haven’t changed significantly, the lender might simply update your financial information and reissue the preapproval.
However, if your financial situation has changed drastically, like if you’ve changed jobs or lost your job, or you’ve taken out a new loan and your credit has taken a hit — you may need to go through the whole preapproval process again.
In these cases, the lender will reassess your borrowing capacity based on your updated financial circumstances. This can change your estimated rate and even the total loan amount you're preapproved for.
FAQ
What documents are needed for a mortgage preapproval?
Typically, lenders will ask for several pieces of information during the preapproval process. These include proof of income, like recent pay stubs or tax returns; proof of assets, such as bank statements; employment verification; and a credit check.
Does getting a preapproval affect my credit score?
Yes, a preapproval usually requires a hard credit inquiry, which can slightly lower your credit score temporarily. However, multiple inquiries from different mortgage lenders within a short period are usually treated as a single inquiry, minimizing the impact on your score.
Can I get preapproved by more than one lender?
Yes, you can get preapproved by more than one lender. Doing so allows you to compare loan terms and rates from multiple lenders so you can choose the best offer.
Bottom line
A mortgage preapproval is a necessary step in the homebuying process to show sellers that you're serious about buying. This letter also gives you an idea of how much you can afford so that you can shop within your budget.
If you still haven’t found the home of your dreams within 60 to 90 days of receiving your preapproval, you can apply for another one — just make sure your financial situation and credit score have not changed.
