See what mortgage you qualify for
In a competitive real estate market, one of your top priorities should be to stand out to sellers. And a mortgage preapproval can be the thing that launches your bid to the top of the offer pile because it proves to home sellers that you’re a serious buyer.
A preapproval is a letter from a mortgage lender that says how much they’re willing to lend you and what loan terms they’ll offer. Getting a preapproval letter isn’t mandatory, but it’s a good idea and can be a critical step in the mortgage process.
So how long does a mortgage preapproval last? Depending on the lender, a mortgage preapproval can last up to 90 days.
What Is a Mortgage Preapproval?
A mortgage preapproval tells you how much a lender may let you borrow to buy a home and how long the preapproval is good for.
By the way, a preapproval letter isn’t the same as a mortgage prequalification letter. Prequalification doesn’t require as much personal and financial information. And the information you report to a lender, like your income, employment status and credit score, isn’t verified.
Think of a mortgage preapproval as a pre-mortgage application. Your lender will request supporting financial documents, including pay stubs, bank statements and tax returns, and verify all your information.
They’ll also perform a hard pull on your credit report, which involves reaching out to the three major credit bureaus (Equifax®, Experian™ and TransUnion®) and requesting your credit report for a thorough review of your credit history.
Feel free to use our handy mortgage preapproval checklist to prepare your paperwork for this key step in the mortgage process.
Going through the steps to get preapproved is worthwhile because you’ll know how much money a lender is offering to lend you for a mortgage.
An estimated loan amount can help you develop a realistic home buying budget and save time while you’re house hunting. If a lender preapproves you for a $300,000 mortgage, you’ll know not to waste any time looking at homes over that amount.
And a preapproval can help persuade sellers to take you seriously. From the seller’s perspective, a buyer who makes an offer without a preapproval letter may not have the money to buy their home.
A preapproval letter signals that a lender has reviewed your finances and is willing to lend you money. It tells the seller you likely have the financing to back up your purchase offer.
What is a mortgage preapproval letter?
A mortgage preapproval letter is a document you can get in the mail or through email.
When you find your dream home and are ready to submit an offer, don’t forget to include a copy of your preapproval letter for the seller. That way, they know a lender has offered financing to purchase a home.
While a mortgage preapproval letter is an important document – it isn’t a final mortgage offer. A preapproval estimates how much you can borrow pending further review of your finances and credit history. You’ll still need to apply and be approved for a mortgage loan.
One of the benefits of getting preapproved is that it usually streamlines the mortgage application process. A preapproval is usually a good sign that you’ll be approved for the mortgage you’re offered.
How Long Is a Mortgage Preapproval Good For?
Depending on the lender, most mortgage preapprovals are good for 90 days.
Some lenders offer preapprovals that last 60 days. Other mortgage lenders keep a preapproval on file for longer than 90 days.
Your preapproval letter will detail how long your mortgage preapproval is good for.
But remain vigilant. Preapprovals don’t last forever. And the reason they expire is simple: Even in 60 – 90 days, your finances could change drastically.
A change in your financial situation (think: career change, reduced work hours, mounting debt) could affect your ability to make your estimated monthly mortgage payments.
Ninety days is typically enough time to complete your home search. Once you have your preapproval letter, you usually have about 3 months to tour homes and make offers before the letter expires.
When Should You Apply for Preapproval?
Because mortgage preapprovals have an expiration date, you should apply when you’re serious about purchasing a home. If you get preapproved too early, your letter might expire before you find a home you want to buy.
A good rule of thumb is to apply for a mortgage preapproval when you’ve found a real estate agent and start touring homes. Your preapproval should last long enough to shop for a home and make an offer.
If you’re still casually scrolling through home listings during lunch breaks or haven’t recruited a real estate agent, you may want to hold off on getting a preapproval.
While we’re big fans of scrolling through listings of beautiful homes online, browsing and saving your favorite homes isn’t the same as touring a property in person. When you start planning home tours, you’re usually ready for preapproval.
The time it takes to get preapproved will vary. Depending on your lender, you may get your preapproval in a few minutes, a few days or within a week.
What Can You Do if Your Preapproval Letter Expires?
The first thing you can do is not panic if your mortgage preapproval expires. You will, however, need to reapply to get a new preapproval letter.
Fortunately, you know what the process involves – and repeating the process shouldn’t set back your home buying plans.
You’ll need to resubmit your proof of income, and your lender will examine your credit history again. If there are significant changes in income or credit history, the size of the loan and the loan terms may change.
Your lender will also perform a hard credit check (aka hard inquiry) during the preapproval process. Because hard credit checks temporarily drop your credit score, try and align your preapproval with the seriousness of your search.
Try Not To Let the Clock Run Out
Securing a mortgage preapproval is a great way to show a seller you’re serious about buying their home. It can also help you draft a realistic budget while you’re shopping for a home.
But your mortgage preapproval has an end date.
Depending on your lender, your letter may last 60 or 90 days. Check your preapproval letter for the expiration date – and mark your calendar.