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Do Mortgage Preapprovals Expire? If So, When?

Ashley Kilroy5-minute read

November 14, 2020

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As part of the home buying process, you’ll have to get preapproved for a mortgage. Once you find a mortgagor that you trust and that approves you, you’ll be able to put an offer in on a home. But how long does a mortgage preapproval last?

Depending on the lender, your credit, and more, a mortgage preapproval will last up to 90 days. However, it’s essential to understand the mortgage preapproval process and your options before you buy a home.

What Is A Mortgage Preapproval?

A mortgage preapproval is a process of determining how much a person can borrow to buy a home. Lenders look at your income, assets, liabilities and credit score to determine the loan amounts and interest rates that you will receive. Your mortgage amount, interest rate and more will be listed in your preapproval letter.

Preapproval is beneficial to home buyers because they’ll know precisely what their home buying budget is. Preapprovals make it easier to shop for a home and make your offer stronger when you put in an offer on a home. If you’re house shopping in a competitive market, if two people put in an offer on a home but only one has preapproval, the preapproved offer will likely be accepted. Finally, preapproval gives you time to sort out issues ahead of time. Preapproval means you’ve done the bulk of the mortgage process upfront, so you’ll only have to focus on closing once you put an offer in on a home.

It’s wise to understand the difference between a mortgage preapproval and a prequalification. A prequalification essentially states that you will qualify for a mortgage but might not give an accurate representation of how much you will be approved for or what your interest rate will be. This is because a prequalification does not use your credit report. Without your credit report, a lender can only estimate what you will be approved for.

What Is A Mortgage Preapproval Letter?

A mortgage preapproval letter is vital for a few reasons. First, real estate agents usually ask to see your preapproval letter before they show you houses. Knowing that you are preapproved will help your agent understand your budget and assure them that you are serious about purchasing a home. Second, a preapproval letter is something you can share with the seller to prove that your offer is legitimate. It will show that you will not have problems getting a mortgage if your offer is accepted.

Take the first step toward the right mortgage.

Apply online for expert recommendations with real interest rates and payments.

How Long Does It Take to Get Preapproved For A Mortgage?

If you’re looking to get preapproved for a mortgage, Rocket Mortgage® can help.

Regardless of if you get preapproved through Rocket Mortgage®, a national mortgagor, or a local firm, the steps to getting preapproved are simple. First, you’ll need to apply and check your credit. Typically, the mortgagor will ask you a series of questions about your financial standing and the home you want to buy. They will then check your income and assets and check your credit. Then, they will give you a preapproval letter. You can contact a Home Loan Expert to get a Verified Approval.

Once you choose a mortgagor to work with, the whole process can take as little as a few minutes over the phone. Be sure to have your Social Security number and other necessary information handy so that they can run a credit check.

How Long Does A Preapproval Last?

The time a mortgage preapproval is valid before expiring can vary depending on your lender. But in most cases, it lasts for around 60 – 90 days. Your financial situation can change substantially within a few months. Many lenders aren’t willing to take the risk of their agreement with a prospective borrower falling through beyond the 90-day mark.

It can be a good thing for a borrower’s financial situation to change. For example, upon their first preapproval, they may have learned that they have a low credit score. If they lower their debt to income ratio and take other steps toward increasing their score, they could raise their score and consequently receive a lower rate on their mortgage preapproval.

Alternatively, someone could lose their job or have another negative impact on their ability to make mortgage payments, which could affect their ability to move forward with the loan process.

Some people’s financial situations don’t change, but they haven’t purchased a house, and their mortgage preapproval expires. They will still need to get a new preapproval letter.

If your mortgage preapproval has expired, you simply need to get preapproved again. You can use the same mortgagor or a different one and can still choose to shop around for the best rates and companies to work with.

While you can get a second preapproval letter, it can be harmful to your credit score. This is because when a mortgagor runs a credit check, it is a hard inquiry on your credit report. A hard inquiry can decrease your credit score by several points, and too many hard inquiries can be a red flag to future lenders.

When Should You Apply For Mortgage Preapproval?

A mortgage preapproval is one of the first and most essential steps toward buying a home. It is wise to understand how much house you can afford before you start shopping. Therefore, you might want to get prequalified for a mortgage as you start looking at homes. Then, when you feel ready to put an offer on a home, you can get preapproved for a mortgage. This way, you will avoid preapproval expiration if you decide to shop around for a while.

Therefore, a borrower should apply for a mortgage preapproval when they are actively in the home buying process, but not so far in advance that they run the risk of their preapproval expiring. If you are unsure if you should get a mortgage preapproval letter, you may want to have a conversation with a mortgagor you trust. They will help you with a prequalification to help you start the home buying process and get a good idea of what you can afford. Then, when you’re ready to put an offer in on a home, you can get a preapproval.

The Bottom Line

Most mortgage preapproval letters last between 30 – 60 days, but some are eligible for up to 90 days. Your mortgage preapproval will list how much you are approved to borrow, your interest rates, and other terms and conditions. Typically, a borrower should wait until they are ready to put an offer in on a home before they get preapproved. This will ensure that their preapproval letter does not expire and that they can confidently put an offer on their future home.

Purchasing a home is an exciting venture. If you are unsure about when you should apply for preapproval or have other questions about the home buying process, it’s wise to talk to an expert at Rocket Mortgage®. They’ll be able to answer any of your questions and help guide you along the way.

Take the first step toward the right mortgage.

Apply online for expert recommendations with real interest rates and payments.

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Ashley Kilroy

Ashley Kilroy is an experienced financial writer. In addition to being a contributing writer at Rocket Homes, she writes for solo entrepreneurs as well as for Fortune 500 companies. Ashley is a finance graduate of the University of Cincinnati. When she isn’t helping people understand their finances, you may find Ashley cage diving with great whites or on safari in South Africa.