Courtney Rosenkrans

NMLS # 1778397
DRE - 02060692

530-820-3863

courtney@keyhomeloans.net

Courtney Rosenkrans Loan Originator

How Long Does a Mortgage Pre-Approval Last?

How Long Does a Mortgage Pre-Approval Last?

The U.S. real estate market has had an extremely low inventory of available homes over the past two years thanks to enormous demand. That has resulted in longer home searches for potential buyers. The National Association of Realtors recently reported that buyers in 2022 were taking an average of eight weeks just to find a home that meets their needs, and then more than half of buyers had to make two or more offers on different properties before signing a contract. Beyond just being an exercise in patience, these long home searches could result in mortgage pre-approvals expiring before a deal is struck, something every buyer should be aware of.

What is a Pre-Approval Letter?

A pre-approval letter is a preliminary guarantee of mortgage funding. Borrowers provide a lender with some basic financial information, like social security numbers for credit checks, bank statements and tax returns. The lender runs the data through their algorithms and decides whether they would be willing to make a mortgage loan and for how much. They then create a letter that the borrower can present to any seller to prove their ability to pay for the home sale. Pre-approval letters give borrowers more credibility and are a huge help in getting offers accepted quickly.

How Long Do They Last?

The typical mortgage pre-approval letter is good for 90 days. This is because plenty can change in three months, both with housing market conditions as well as the financial circumstances of the borrower. The lender does not want to give an open-ended promise for funding even if the borrower loses their job or takes out a huge new loan.

How To Renew a Mortgage Pre-Approval

The good news is that mortgage pre-approvals can be easily renewed. As a borrower, keep an eye on the expiration date and talk to your lender before it ends. Your lender can then recheck all your documentation to make sure nothing has changed and re-approve you. You may need to provide updated pay stubs and statements of your assets. If there have been any major life changes like a divorce or job loss or large medical bills, you’ll need to disclose that as well. Any significant changes will likely alter the terms of your pre-approval.  

While this renewal process should be quicker than the original mortgage pre-approval timeframe as the lender already has most of your information, it can still take several days, so be sure to start the re-approval with plenty of time. 

A Chance to Reconsider Options

Having to renew your mortgage pre-approval can actually be helpful. It gives you the opportunity to change loan types. Perhaps you initially chose a fixed-rate mortgage, but interest rates have jumped during the last 90 days and now an adjustable-rate mortgage looks more attractive with its introductory low rate. In your new pre-approval letter, you can stipulate that change.

In today’s uncertain housing climate, it is a good idea to stay in frequent contact to learn about updated lending terms and to make sure your mortgage pre-approval stays current.

Give us a call today if you would like to get Pre-Approved for a new home loan.