How Long Does a Mortgage Pre-approval Last?
Are you looking to buy a home for the first time? From saving for a down payment to learning about your mortgage options, you may already realize there are many steps in the home buying process. And one of those steps is getting a pre-approval for a mortgage.
If you’ve already gotten a mortgage loan pre-approval letter — congrats! Getting pre-approved shows a seller that your financing is in order and you’re serious about purchasing a home. But how do you use that letter and how long until it expires? Let’s find out.
What Is a Mortgage Pre-approval?
If you’re ready to get pre-approved for a mortgage, you’re on the right path to buying a home. This is the point of the process where you’ll meet with a loan officer who’ll look at your finances, like income, debt, assets and credit history. This will help them decide how much money (and if) they’re willing to give you a loan, how much you can afford each month and the interest rate you’ll be charged.
Why Do You Need a Mortgage Pre-approval Letter?
Once pre-approved for a mortgage, you’ll get a letter from the lender that you can show to sellers if you want to place an offer on a home. What’s the purpose of the letter? The four main benefits include:
- It shows a seller that you have a lender who is willing to work with you.
- It validates that you can afford their house.
- It’s proof that your finances are in good shape and you likely won’t be denied a mortgage.
- It gives you a leg up on other buyers who may be interested but don’t have a pre-approval letter.
- You can streamline the closing step for the loan application since your information is already in the lender’s system.
Does a Pre-approval Letter Expire?
Once you have your pre-approval letter, you may be wondering how long it lasts. Your income, credit history, interest rate — consider all the ways your finances can change once you get your letter. For this reason, a mortgage pre-approval typically lasts for 60 to 90 days. Once it expires, you’ll connect with your lender again with your updated paperwork and get a new one. The good news is, this typically doesn’t take too much time since they have most of your information on file.
How Do You Get a Mortgage Pre-approval?
To get a mortgage pre-approval, you’ll need to set up a meeting with a lender at a bank or finance company, or you may be able to complete an online application process with a financing company. You’ll want to have the following on hand:
- Social security number
- Driver’s license or other picture ID
- Proof of employment and proof of income/additional income (e.g. recent paystubs, W-2 forms)
- Tax documents (last two years of federal income tax returns)
- Place of residence
- Bank statements
- Other assets
- Real estate
- Credit information
- Monthly expenses
You might have heard about a mortgage pre-qualification — which is different than a preapproval. Find out more about the difference between a preapproval and prequalification.
How Long Does it Take to Get Pre-approved?
As long as you have all the proper paper work when you visit your lender, you can get the pre-approval the same day. But remember, everyone’s finances are different. Depending on things like your debt, credit score and other financial hitches, it could take much longer. Your best bet is to get in touch with your lender before meeting and make sure you have all the necessary paperwork they’ll use.
Understanding how a mortgage pre-approval plays a role in the home-buying process can mean the difference between getting the house you want or giving it up to someone who was more prepared! Once you’re ready to seriously begin searching for a home, set up time to meet with a lender and get your pre-approval letter in hand.
Want to learn more about buying a home? From saving for a down payment to what to do after closing, our first-time home buyer's guide walks you through the home buying process.
And don’t forget — another key step to buying a home is properly insuring it with homeowners coverage. At American Family Insurance, our agents are ready to help discuss the best ways to protect your hard-earned dream.
Related Topics: Owning A Home