A pre-approved mortgage is usually good for up to 120 days.
In a competitive housing market, having a pre-approved mortgage can help you stand apart from other potential buyers. But how long are pre-approved mortgages good for?
“Pre-approvals are good for 120 days because after that time frame the credit report expires and a new one has to be pulled and re-evaluated,” says Reed Letson, owner of Colorado-based Elevation Mortgage.
Below, you'll get all the details of preapproval for a mortgage to prepare for this important step on your home-buying journey.
What is a Mortgage Pre-Approval?
A mortgage pre-approval is a document from a lender that states a borrower has the finances to receive and pay for a home loan up to a certain amount. It is not the same as being approved for a mortgage, though sellers are more likely to entertain offers from pre-approved buyers because they know the buyer can afford the home.
Getting a pre-approval can also speed up the closing time so you can move in sooner.
How Do You Get a Mortgage Pre-Approval?
Getting a mortgage pre-approval is similar to receiving a traditional mortgage home loan. Letson recommends starting with a local loan officer who will discuss your income, assets, credit history and more.
If approved, you'll be given a prequalification letter that shows the lender's willingness to give you mortgage financing based on their initial analysis. The letter states the mortgage amount you've been prequalified for and the duration of the approval. If the pre-approval expires before you can purchase a property, you'll need to renew the preapproval or reapply.
Here's a complete list of documents you'll need to bring to get mortgage pre-approval:
- Government-issued ID such as a state-issued driver’s license or ID card, passport or U.S. alien registration card.
- Social Security card or at least your Social Security number
- Pay stubs for proof of income
- Bank statements for the past two to three months
- Tax documents, including W-2s
- Investment account statements including 401(k), 403(b), individual retirement accounts (IRAs), stocks, bonds and mutual funds
- All debts including car payments, rent, credit card debt, student loans, home insurance and medical bills
- Rental information
- Landlord reference letter(s) stating that you've made rental payments in full and on time
- Gift letters if a loved one is gifting you money for part of the down payment
“Buyer beware, if your loan officer is not collecting all the documentation upfront and is not running your file through an automated underwriting system to pre-approve you, there is a much greater chance of your loan being denied during underwriting, potentially costing you time, your earnest money deposit and your dream of homeownership,” Letson adds.
The mortgage lender will also pull your credit report. Applying for pre-approval from multiple lenders within seven to 45 days should count as only one pull to your credit report though the credit bureaus don't clearly state the exact time span. To be safe, do all the mortgage pre-approval applications within a couple of weeks to avoid impacting your credit score with multiple credit pulls.
How Long are Mortgage Pre-Approvals Good For?
According to Letson, pre-approved mortgages are good for up to 120 days. In other words, the loan has to be closed by the 120th day after the date on your pre-approval letter.
“If it’s a 30-day close, you really have 90 days to get under contract,” Letson adds. “Currently, we are in a very volatile market and I would recommend checking in with your loan officer every couple of weeks or even days as mortgage rates move with the stock market and rates are changing daily, sometimes multiple times a day.”
RELATED: How to Make an Offer on a House
Should I Get a Mortgage Pre-Approval?
If you're unsure what type of home you can purchase, a mortgage pre-approval can clarify what you qualify for right now. You can always keep building up savings, improve your credit or work to increase income to get a better offer. Remember that you only need one lender to approve the mortgage to get the home of your dreams. With careful financial planning, a mortgage pre-approval could take you one step closer.
Why You Should Trust Us
Benzinga has offered investment and mortgage advice to more than one million people. Our experts include financial professionals and homeowners such as Anthony O’Reilly, the writer of this piece. Anthony is a former journalist who’s won awards for his New York City economy coverage. He’s navigated tricky real estate markets in New York, Northern Virginia and North Carolina.
For this story, we worked with Reed Letson, a mortgage broker and owner of Elevation Mortgage in Colorado.
Frequently Asked Questions
Yes, mortgage pre-approvals expire after 120 days.
How far in advance should you get pre-approved for a mortgage?
A mortgage pre-approval is good for 120 days. If there’s a particular property you’re interested in and want to set yourself apart from other potential buyers, have a recent pre-approval ready to show that you can afford the asking price.
How long is an FHA pre-approval good for?
An FHA pre-approval is good for 60-90 days, though the exact period may depend on your lender.
Sources
- Reed Letson, mortgage broker and owner of Elevation Mortgage
About Anthony O'Reilly
Anthony O’Reilly is an updates editor for Benzinga. He’s won numerous journalism awards for his coverage of the New York City economy and Long Island school district budgets.
