How long does mortgage pre-approval last?

The duration of mortgage pre-approval typically ranges from 60 to 90 business days. 

This time frame can vary depending on the lender and individual circumstances; be sure to clarify the exact duration of your pre-approval.

During this period, homebuyers can search for a dream home and place a bid.

Conversely, they can also initiate the pre-approval process once they have found the perfect match after house-hunting for a while. 

However, a pre-approval letter doesn’t guarantee final loan approval, as mortgage loan procedures involve additional steps and requirements — but it’s a big step in that direction, getting the loan application process underway.

What is mortgage pre-approval?

Mortgage pre-approval is a useful and viable step in the home buying process that involves a mortgage lender’s thorough assessment of your financial situation and creditworthiness.

It estimates the loan amount you qualify for, helping you set realistic expectations for your home search process.

To initiate mortgage pre-approval, you may be asked to submit financial documents such as bank statements, pay stubs, tax returns, and a credit report.

A lender will then check your income, employment history, credit score, credit history, and overall financial health to assess your eligibility for a home loan.

What is a mortgage pre-approval letter?

A mortgage pre-approval letter is a document provided by a lender that confirms your eligibility for a targeted loan amount based on your financial information — generally centered on your credit score at this stage.

It gives you an advantage when making decisions on today’s real estate market.

Let’s highlight some key aspects of a mortgage pre-approval letter:

Specific loan amount

It specifies the maximum loan amount you are approved for based on a lender’s assessment of your financial profile.

This amount serves as a guideline for your home search and gives you a clear understanding of your budget.

Proof of serious intent

It positively impacts sellers and realtors, showcasing your eligibility and commitment to securing the necessary funds for the purchase.

Streamlined loan process

It fast-tracks the steps of your loan application once you find your desired home — or while narrowing down choices.

A pre-approval letter provides a head start, allowing you to move forward quickly with your mortgage application and potentially expedite the closing timeline.

Factors affecting when you receive your mortgage pre-approval

Let’s explore some key elements that can affect the time it takes to have a pre-approval letter in your hands:

Financial status

These factors include your credit score, income, and employment history.

A solid financial profile can expedite the process, while specific financial challenges may require additional documentation and review.

Lender-specific policies

Some lenders may have streamlined processes for administering mortgage pre-approvals, while others may have more extensive scoring requirements that take longer to complete.

While the time frame for the pre-approval letter is set, external factors such as interest rate changes affect the actual terms of the loan once finalized. 

Until a rate is locked in, remember that a quoted interest rate is just that — a quote, and subject to change. Always work closely with your lender to stay proactive and navigate any potential changes.  

Does mortgage pre-approval expire?

Yes, it does have an expiration date.

As mentioned earlier, the typical duration ranges from 60 to 90 business days.

The duration provided by a mortgage lender gives you a specific time frame within which you can make an offer.

You then initiate and complete the underwriting stage, lock in an interest rate and continue the home buying process.

It doesn’t mean you are no longer eligible for a mortgage if the pre-approval expires.

However, it does mean that a lender will reassess your financial situation and documents to provide an update.

During this reassessment, changes in your financial status or credit history may impact the terms, such as the loan amount or interest rate.

Can you extend a pre-approval?

If it expires before you find a home or decide to make an offer, you may have the option to extend it.

Be sure to communicate with your lender and discuss the necessary steps to extend the pre-approval.

Lender-specific policies may vary, so it’s best to consult a loan officer to understand your options.

What happens if my mortgage pre-approval expires?

If your mortgage pre-approval expires before you find a property and haven’t secured a home or initiated the loan application process, don’t panic.

Pre-approval expiration is not uncommon, and it doesn’t mean you cannot secure a deal. However, it does require you to reapply.

You may need to provide up-to-date financial data and sign new documents.

It’s crucial to stay in touch with your lender and be proactive in providing any additional documentation they may require.

Doing so can expedite the process and ensure you are ready to make an offer during your house-hunting.

Wrapping up: your path to homeownership

Here are the key takeaways from this guide:

  • Mortgage pre-approval typically lasts for 60 to 90 business days, but it can vary based on the lender and individual circumstances;
  • Mortgage pre-approval involves a thorough assessment of your financial situation and creditworthiness by a lender;
  • Factors such as your financial situation, lender-specific policies, and external factors can affect the duration of mortgage pre-approval;
  • Mortgage pre-approval has an expiration date, and it’s important to take necessary steps within that period to secure your financing;
  • If your pre-approval expires, you may have the option to extend it or reapply based on a lender’s policies.

With PandaDoc, all the stakeholders involved can simplify and accelerate their mortgage pre-approval journey.

Stay organized and compliant by easily managing all the necessary forms and paperwork in one secure platform. 

Need expert advice along the way? Our dedicated support team is here to assist you!