How long is my mortgage pre-approval valid? – Nerd Wallet

As mortgage rates continue to rise sharply and eager shoppers compete for a limited supply of homes, home buyers may struggle to make a successful offer ahead of the mortgage. there is. Pre-approval Letter expires.

According to Zillow, more than half of homebuyers this year reported making two or more offers before buying a home. That is after finding one of his that meets their needs, which takes an average of eight weeks, according to the National Association of Realtors. ‘2022 Home Buyers and Sellers Generational Trends Report. For some, the search lasts longer.

A regular letter is valid for 90 days, but it depends on the lender. This punctual document from the lender provides a preliminary estimate of the amount and terms on which you wish to lend. It can close the deal because it shows the home seller that the mortgage is likely to be safe.

If your home search is taking longer than the pre-approval period, but you’re still focused on your search, renewing your pre-approval with your lender can take some of the pressure off your shoulders. These tips will help you protect your mortgage pre-approval and keep your home-buying budget under control.

How to Renew Your Mortgage Preapproval

Keep your personal financial documents handy and contact your lender before the mortgage pre-approval period ends.

Check letter expiry date

The preauthorization letter must state an expiration date or must state an expiration date (in most cases, no more than 90 days). If in doubt, call or email your landlord representative to confirm dates.

Contact a Mortgage Officer

Please contact the mortgage officer listed in the letter and explain that you would like to renew your preapproval. The lender already has your basic information, so the reapplication process won’t take as long as it did when you first applied for preapproval. According to Bank of America, it can take up to 10 business days to receive your new preauthorization letter, so plan ahead. That way, you don’t go through the gap of being actively shopping for Home He and not having pre-approved. This also helps ensure that your working interest rate and total loan amount estimates are timely and realistic.

update documentation

You should provide your current version Pre-approved documentThis includes up-to-date payslips and asset statements for bank accounts, retirement accounts, and brokerage accounts. If you’ve experienced a major life event that impacts your borrower’s profile, such as a divorce, you should renew your lender. Because this revaluation involves a hard credit pull, your credit score will also temporarily decrease.

Think of this process as an “update” rather than an “extend”. The preapproval amount and terms are likely to change with the new letter.

Consider a different type of mortgage

Sonu Mittal, head of mortgages at Dallas-based Citizens, said applying for a new pre-approval letter would give lenders an opportunity to explore different types of loan options. for example, variable rate mortgage It is becoming increasingly popular as borrowers bet on long-term interest rate movements. ARM rates are typically low during the introductory period and then vary depending on the market.

Some lenders advertise low or temporary interest rate loan programs. For example, New American Funding offers a “buy-down loan” that allows a borrower to pay for the first few years in a home at an interest rate that is 1% or 2% lower than the 30-year fixed rate, or a combination of these discounts. offers.

If you choose to switch lenders, you will have to shop again and start the application process all over again.

Reimagine your starter home

“If someone got pre-approval months in advance, there is a very good chance that they can renew it,” says Mittal. Still, Mittal says even borrowers who are in good financial shape could see their budgets squeezed with new pre-approval letters in the months ahead.Rising degree of interest Mortgages are getting more expensive, so borrowers who renew their preapproval may end up with a lower mortgage total for the same monthly payment. If you’re struggling to find a home within your pre-approved budget, some concessions may be required.

“I feel like a lot of millennials are trying to transition from renting to their dream home,” says Steve Proetz, Realtor at Century 21 Awards in Carlsbad, California. Some homebuyers may find that a small home, condo, or property outside of their desired area makes sense as a stepping stone to their real estate dreams. Limiting your search to what you really have room for instead of checking the most boxes on your wish list can open up more opportunities.

Check with your landlord frequently

Ploetz says it’s a mistake to think of the preapproval letter as a static document. “We encourage our clients to stay in touch with their lenders on a bi-weekly basis,” he says, or else they risk working with outdated information and interfering with searches, he said. says.

If you want to level up your home buying strategy, it’s important to keep your mortgage pre-approved. By staying in touch with your lenders frequently and factoring in your changing budgets, you’ll have the tools to shop like a pro, even in challenging markets.

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