How Long is a Mortgage Pre-Approval Good For?
If you got pre-approved for a mortgage and are still looking for a home, you may be wondering how long is your approval good for?
Hello, this is (name) with (company) and in this video I am going to share what you need to know about the length of time your pre-approval is good for and steps you need to take to protect and extend it.
The bottom line is that most mortgage pre-approvals are good for 90 days. However, that doesn’t mean that you can go crazy and buy a new truck or a bunch of furniture for that new home you are looking for. You need to be aware of your spending and lifestyle changes, especially when you are in the middle of buying or refinancing your home.
The mortgage pre-approval is your first big step towards homeownership. And getting pre-approved early in the process simplifies everything that comes next.
No home seller will take you seriously unless you show them that you’re qualified. And as valuable as your pre-approval is to a seller, it’s even more so for you.
Your pre-approval shows exactly how much home you qualify for, which is essential for house hunting and will give you an estimated monthly housing payment so you can dial in your budget and figure out how much home you want to afford.
If you want to start house hunting with the intent of making an offer, get pre-approved now.
What is a Mortgage Pre-Approval?
Consider a mortgage pre-approval as a dress rehearsal for your actual mortgage.
The pre-approval process considers your financial situation (credit score, income, assets, etc.). This is used to determine the loan size, loan program, down payment requirement and interest rate you’re eligible for. Plus, you’ll receive an estimated monthly housing payment, which is essential for budgeting. Even if you are just beginning your house hunting, you will need to get a pre-approval today. Your mortgage pre-approval is typically good for 90 days.
Interest rates are constantly changing, credit scores are updated monthly, and your financial situation can change over time. All these things can affect your maximum purchase price — for better or worse.
If you haven’t yet found a home when you’re close to that 90-day window, contact your mortgage professional and tell them you’d like to get your pre-approval refreshed.
You’ll provide some updated documentation; they’ll refresh your credit report and go over all the details again. If there are positive, negative, or no changes at all, they’ll let you know. And you’ll be given a fresh pre-approval letter good for another 90 days of house hunting.
How Do You Get a Mortgage Pre-Approval?
To get a pre-approval, the mortgage lender will look at:
• Credit
• Employment and income verification
• Income tax history
• Total assets
• Down payment and desired mortgage amount
Mortgage pre-approvals only take a few minutes to complete and can be done online, over the phone, or in person — whichever you prefer.
When Should You Apply for Pre-Approval?
Pre-approvals are the first big step towards homeownership.
Payment estimates, interest rate, down payment amount, and loan size are among the most critical pieces of information you’ll receive with your pre-approval. All of this is essential to budgeting and focusing on how much home you want to buy.
Get pre-approved as early as possible. By doing this, you’ll plan your purchase more effectively and always be ready to make a serious offer when you come across a home you love.
Pre-Approval vs Pre-Qualification
A pre-approval is a complete look into your financial history and allows the lender to guarantee your approval for a specific loan amount and interest rate.
Pre-qualifications use basic income and credit history to estimate how much mortgage you qualify for, but they cannot be guaranteed.
Pre-qualifications sound convenient, but pre-approvals allow you to submit an offer for a home and simplify the mortgage process once your offer is accepted.
Mortgage pre-approvals give you solid proof that you can get the mortgage you need to buy a home, allowing you to budget appropriately and submit an offer as soon as you find a home.
Mortgage pre-approvals expire after 90 days, so stay in touch with your mortgage professional to refresh if house hunting is taking longer than planned.
Thanks for watching. If there is anything we can do to help you with your home financing goals, please don’t hesitate to call.
