April 28, 2022
When you start on your home buying journey, the likely first step is getting pre-approval for a mortgage. It officially begins when you receive a pre-approval letter from your lender which tells you much you'll be allowed to borrow, the types of mortgages available to you, and what the terms of the loan contract will be.
You might be wondering if mortgage pre-approvals have an expiration date. In this article, we'll answer that question while also taking a closer look at the pre-approval process.
As mentioned, a mortgage pre-approval is an official letter laying out the loan amount and terms - assuming you'll meet all the requirements. However, how do you get to this point?
That's where the actual process comes in and starts in earnest. Lenders will look at information such as how much debt you have compared to your income and assets. With those details, they will determine the amount of money they're willing to lend you so you can purchase a home.
Typically, lenders want to see you're financially sound and aren't a risk. To assess this, they'll often look at your finances through various methods such as:
They'll also need to verify your identity, so you'll be required to produce the following as well:
Once a lender pre-approves you, you'll receive the pre-approval letter. That gives you substantial leverage and power when going out house hunting. Here are some of the key benefits you'll see with a pre-approval:
In short, yes they do. It will vary from lender to lender. But on average, they last somewhere between 60 and 90 days. Beyond that time period, your lender will typically reach out to you to get a new pre-approval, perform a new credit, verify/update assets and youe financial profile.
In a nutshell, mortgage pre-approvals lay out the amount, terms, and conditions from the lender. However, they don't last forever and will expire in roughly 2-3 months. Luckliy, after they expire, getting a new pre-approval typically takes a lot less time and effort.
Buying a home, whether it's your first or fifth, is always exciting but can sometimes be confusing. Contact us today and let us help you through the process.