How long does it take for a mortgage approval to expire?

When searching for your first home, getting a mortgage pre-approval from the lender is the first and crucial step. It means you are ready to move beyond browsing sessions on Zillow and actually start getting serious about your home-buying goals.

Before applying for mortgage pre-approval, it’s important to understand what you will achieve. It can take some work, and it doesn’t last forever. Mortgage pre-approvals typically last from 30 to 90 days on average, although the exact duration will vary by lender.

Here’s what you need to know about how to achieve your home-buying goals within such short timeframes.

What is mortgage approval?

Mortgage approval is a letter you receive from a potential lender indicating that you are likely to be approved for a loan with them. This means that you may have gone through some preliminary checks, like verifying your income and credit score, and the lender just needs to verify other details about the loan once you are ready to make an offer on a home.

A mortgage approval letter does not mean that the loan is automatically approved. You can still be denied, but that is less likely.

Why do I need mortgage approval?

Most of the time, you do not need a mortgage approval letter to buy a home, but having one can help you stand out once you are ready to purchase a home. It shows the seller that you are serious about buying their home. For this reason, some sellers may require a pre-approval letter from you to schedule a viewing.

Note: In highly competitive seller markets, a mortgage approval letter can be considered a prerequisite for your offer to be taken seriously among other offers.

The mortgage approval process

As with any loan or line of credit, the lender will need to verify your ability to repay the loan in full and that you have good credit. Here are some documents the lender may require when applying for a mortgage approval:

• Pay stubs from the last two years
• Recent bank statements
• Tax returns for two years
• Wage payment receipts for the last 30 days
• Proof of any other income you receive
• Information on any long-term debts or assets you own

This is a much shorter list of information you will need when applying for a mortgage loan, but the exact documents required can vary from lender to lender.

How long does a mortgage approval last?

After applying for mortgage approval, the lender will send you a letter if they decide you are qualified. This letter will include an expiration date, which typically lasts from 30 to 90 days.

It’s good to know how long your mortgage approval will last before applying since that will inform you how quickly you need to write an offer on a home. Don’t worry too much about this. It’s common for home seekers to continue searching even after their pre-approval has expired. Lenders have a way to handle that too.

Note: According to the National Association of Realtors, the average buyer tours nine homes over eight weeks before finding the right one.

What happens when a mortgage approval expires?

If your mortgage approval expires before you can make an offer on a home and get it accepted, don’t worry. You should be able to renew your mortgage approval by providing updated documents to the lender that show your financial situation hasn’t changed since your last application. Then, simply get a new mortgage approval letter and repeat the process until you can secure the home you want.

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It is also a good idea to check the policies of the potential mortgage lender before applying for a mortgage pre-approval. Make sure to ask them:

• What documents will need to be seen?
• Will you need to undergo a hard credit check again?
• Who should be contacted if you need to renew the mortgage pre-approval letter?

Frequently Asked Questions

How long does it take to get a mortgage approval letter?
It depends on the mortgage bank. Some banks can process your mortgage approval request the next business day. It usually takes a bit longer, like a week. If you are self-employed, it may take longer – up to two weeks.

Is pre-qualification information the same as pre-approval?
No. Many people (and even some lenders) use the terms interchangeably, but pre-qualification information carries less weight than pre-approval. Pre-qualification is mostly a way to help you determine how much you can afford to spend on a home; a mortgage lender looks at your financial situation and gives you an idea of your home budget. This typically does not involve a credit check or any of the strict documentation required to ensure you are well-qualified.

When should I apply for a mortgage approval?
Since mortgage approvals usually last only from 30 to 90 days, it’s a good idea to wait until you are ready to make offers on homes before applying for a mortgage approval.

Source: https://www.thebalancemoney.com/how-long-does-a-mortgage-preapproval-last-5195693