How Long is a Mortgage Preapproval Good For?

By Amanda Bailey
11 min read

How Long is a Mortgage Preapproval Good For?

How long is a pre approval good for? 120 days. Sometimes. But it can be different for your lender. Read on to find out what impacts this timeframe and how to manage it.

Key Takeaways

  • A mortgage preapproval gives buyers a budget and shows sellers you’re serious. It is good for up to 120 days.
  • An Upfront Approval Guarantee gives you an advantage in competitive markets by proving to sellers you’re fully approved, no contingencies.
  • Renew your preapproval easily but do. Keep your financial info up to date to avoid delays and potential credit score impacts.

What is a Mortgage Preapproval

So, what is a mortgage preapproval and why is it so important? A mortgage preapproval is a formal written statement from a lender saying how much they are willing to lend based on a full review of your financial situation. This involves reviewing your income, debts, assets and credit history to give them a clear picture of your ability to make mortgage payments.

Mortgage preapproval is often confused with mortgage prequalification but they are very different. Prequalification can give you an estimate of how much you can borrow but is based on self reported information and doesn’t carry the same weight as preapproval. Preapproval involves a more in depth process where the lender verifies your financial information and does a hard credit inquiry. This makes preapproval more credible and reliable.

A preapproval letter can be a game changer before you start looking at homes. It shows sellers you are a serious buyer who has gone through the process to get approved. In a competitive market, this can give you a big advantage as sellers often require proof of a buyer’s ability to close. Think of it as your passport in the world of real estate, opening doors and making your offers stand out.

The preapproval process typically requires you to submit recent pay stubs, tax returns and bank statements to your lender. This not only gives you a home buying budget but also addresses any potential financial issues early.

Being preapproved allows you to shop for homes confidently, knowing your budget and knowing you have financing for your offer.

How Long Is a Preapproval Good For

After you get your preapproval, knowing the validity period is key. Typically a preapproval letter is good for 120 days, sometimes longer depending on the lender. So you have about 4 months to find a home and make an offer before your preapproval expires.

Knowing how long your preapproval is good for is important so you can plan your house hunting and offer making timeline. If your preapproval expires before you find a home, you’ll need to go through the preapproval process again which may involve another hard credit inquiry and resubmitting financial documents.

Stay in touch with your lender and keep an eye on your preapproval expiration date.

Standard Validity Periods

Most preapprovals are good for 120 days which is standard across many lenders. This gives the lender the most current financial information about you when you’re shopping for a home. Knowing this timeframe helps you plan your home search and make timely decisions to avoid having to renew your preapproval.

These validity periods play a big role in guiding borrowers through the mortgage application process.

The Upfront Approval Guarantee Advantage

Imagine having an ace up your sleeve that not only gives you confidence but also gives you an advantage in a competitive market. That’s what an Upfront Approval Guarantee offers. An Upfront Approval Guarantee is a commitment from the lender that you are approved for a mortgage, subject to certain conditions. This guarantee can make your offer as strong as a cash offer, giving you an edge.

With an Upfront Approval Guarantee you have the backing of a fully underwritten approval, which reduces contingencies and can speed up closing times. It assures sellers you are a serious buyer who is fully approved to purchase, giving them the confidence that the deal won’t fall through due to financing issues.

This can be especially helpful in bidding wars where having an Upfront Approval Guarantee can make your offer stand out.

What is an Upfront Approval Guarantee?

An Upfront Approval Guarantee essentially means you are fully approved to purchase the property, making your offer as good as a cash offer. This guarantee is based on a full review of your financials, including bank records, tax statements, credit scores and income. Sellers love offers backed by an Upfront Approval Guarantee because it reduces the risk of the deal falling through.

Getting an Upfront Approval Guarantee involves a thorough application process where your financial information is verified upfront. So by the time you make an offer, your financing is already locked in and you can proceed with confidence.

The Upfront Approval Guarantee lets you win offers even in competitive situations, giving you a big advantage over other buyers.

How It Works

The process of getting an Upfront Approval Guarantee starts with an online application where you securely submit your financial documents. This includes verifying your bank records, tax statements, credit scores, income, assets and debt-to-income ratio. By underwriting these documents upfront you and your lender can identify any potential issues early on and address them before you start house hunting.

Once your financial information is verified, you get a fully underwritten approval, which means you have full approval to shop for a home. This upfront approval not only gives you peace of mind but also lets you make aggressive offers without the financing contingency, which significantly increases your chances of getting a property in a competitive market.

Benefits for Buyers

An Upfront Approval Guarantee is a secret weapon for buyers, offering many benefits that make the home buying process smoother and more successful. One of the biggest advantages is the ability to waive the financing contingency, making your offer more attractive to sellers. This can be especially helpful in a competitive market where multiple buyers are after the same property.

With an Upfront Approval Guarantee you can close in as little as 10 days, which is much faster than the traditional mortgage process. This expedited timeline can be the deciding factor for sellers looking for a quick and hassle free sale. Plus with a fully underwritten approval any potential issues are resolved before you even start house hunting so you can shop with confidence and make competitive offers.

An Upfront Approval Guarantee can give first time homebuyers a big boost in purchasing power. It improves your chances of getting a house and gives you the confidence to make offers like a cash buyer. This program can be a game changer especially in a competitive market where every advantage counts.

Renewing Your Preapproval

If your preapproval expires before you find a home, don’t panic. Renewing your preapproval is easy but do it quickly. The first step is to reach out to your lender as soon as your preapproval expires to discuss renewal options. This way you can continue to shop for a home without delay.

Renewing your mortgage preapproval involves submitting updated financial documents to verify your current situation. This includes recent pay stubs, tax returns and bank statements. Keeping your financial information up to date is key to avoid surprises during renewal. Your lender will use the updated information to re-assess your eligibility and loan amount.

Reapplying for preapproval after it expires involves another hard credit inquiry which can temporarily lower your credit score. So manage your reapplication process well and communicate with your lender to understand the required documents and steps involved.

Confirm the Expiration Date

The first step in renewing your mortgage preapproval is to confirm the expiration date of your preapproval letter. Knowing this date helps you manage your timeline and avoid lapses in your preapproval status. If you’re not sure about the expiration date, don’t hesitate to call or email your lender for clarification.

This proactive approach keeps you on track with your home buying process.

Update Your Financial Information

Lenders put an expiration date on preapproval letters so they have the most up to date financial information about you. If there are changes to your financial situation during the preapproval period, such as a new job or big purchases, you must submit updated financial documents as soon as possible. This includes recent pay stubs, tax returns and any other relevant financial information.

Renewing your preapproval may involve another hard credit pull which will cause a temporary dip in your credit score. But this is a necessary step to ensure your lender has an accurate picture of your financial situation.

By keeping your financial information up to date and communicating with your lender you can navigate the renewal process smoothly and continue your home search without interruption.

Credit Score Impact

One of the biggest concerns many buyers have is how mortgage preapproval affects their credit score. The process of getting a mortgage preapproval involves a hard credit inquiry which can temporarily lower your credit score. A hard inquiry checks your credit report, indicating you are applying for new credit.

The impact of a hard inquiry is generally minor and short term. Each hard credit check during mortgage preapproval can lower your score by about 5 points. The effect usually lasts for a few months and then your credit score should recover.

To minimize the impact, apply for all mortgages within the same 30 day period.

Hard Credit Inquiry

A hard inquiry occurs when a lender checks your credit as part of the mortgage preapproval process. This type of inquiry can cause a temporary dip in your credit score. Typically it will lower your score by about 5 points for each inquiry. The impact of a hard inquiry is usually short term and will affect your credit score for a few months before it recovers.

To minimize the impact of hard credit inquiries, it’s best to apply for all your mortgages within a short timeframe, ideally within the same 30 day period. This way credit bureaus will treat multiple inquiries as one, reducing the overall impact on your credit score. This is useful when shopping for mortgage loans from multiple lenders.

Multiple Inquiries

When you’re shopping for a mortgage and making multiple preapproval requests, credit bureaus will treat these inquiries as a single inquiry if they occur within a short period. This is designed to allow consumers to shop around for the best mortgage rates without severely impacting their credit scores.

Credit bureaus have specific guidelines on processing multiple preapproval inquiries, usually within a 45 day window. This means you can make multiple inquiries within this period without worrying about a big drop in your credit score and credit reports.

This allowance reduces the overall impact on your credit rating and allows you to explore different mortgage options from various lenders.

Finalize Your Home Loan

After finding your dream home and while your mortgage preapproval is still valid, the next step is to finalize your mortgage application. This involves choosing a lender and proceed with the full application process. The lender will check for any changes in your financial situation before moving forward with the application.

Having an Upfront Approval Guarantee can simplify this process. With a fully underwritten mortgage loan and home loans, buyers can make offers with confidence, knowing they are preapproved for a mortgage and their financing is already locked in. This reduces the likelihood of issues during closing and allows you to make aggressive offers without delays.

Full Application

Submitting the full mortgage application is a key step in finalizing your home loan. This involves providing detailed documentation of your income, assets and debts. Your lender will require updated financial documents such as recent pay stubs, bank statements and tax returns to verify your financial situation. You will also need to provide a fully executed Purchase Agreement and proof of earnest money deposit.The lender will review your financial documents and credit history to confirm your mortgage application details. This includes making sure there are no changes in your financial situation that could impact your eligibility for the mortgage lender loan.

The process of getting an Upfront Approval Guarantee also involves submitting detailed financial documents to determine your eligibility and loan amount. Once everything is good to go, you can move forward with confidence knowing your financing is locked in.

Closing

Closing is the final step in the home buying process. It starts with an appraisal of the property to ensure it matches the purchase price. Once appraisal and underwriting is complete you’ll get a clear to close notification and can move forward with closing.

Before the closing appointment a final walk through of the property is done to ensure it’s in the agreed upon condition. At the closing appointment you’ll sign all the necessary documents to transfer ownership of the property. This includes signing the mortgage note, deed of trust and other relevant paperwork.

After signing everything you’ll get the keys to your new home marking the end of the home buying process and the beginning of your journey as a homeowner.

Summary

Understanding the mortgage preapproval process can make a big difference in your home buying experience. From the initial preapproval to renewing your preapproval and finalizing your home loan each step is important in getting your dream home. With an Upfront Approval Guarantee you can navigate the competitive market with confidence and make strong offers that stand out. Remember, stay informed and proactive throughout the home buying process and not only will you get financing but a smooth and successful journey to homeownership.

FAQs

How long is a mortgage preapproval good for?

A mortgage preapproval is good for 120 days but can vary by lender. Just keep an eye on the expiration so you don’t miss out!

What’s the difference between mortgage preapproval and prequalification?

Mortgage prequalification gives you an estimate of how much you can borrow based on what you say, while preapproval digs deeper into your finances and is a stronger indicator you’ll actually get that loan. So if you’re serious about house hunting aim for preapproval!

How does an Upfront Approval Guarantee benefit homebuyers?

An Upfront Approval Guarantee gives you more buying power and makes your offer more attractive to sellers so they can close faster. It’s a smart move to make your homebuying experience easier!

What if my mortgage preapproval expires before I find a home?

If your mortgage preapproval expires, don’t stress—you can renew it by contacting your lender and providing updated financial info. Just keep in mind it may require another credit check.

How does mortgage preapproval affect my credit score?

Mortgage preapproval involves a hard inquiry that can drop your credit score by a few points. But if you apply for multiple preapprovals in a short period you can minimize that impact.