Pre-Approval

Pre-approval letters are typically valid for anywhere between 45 and 60 days. However, sometimes they can be good for up to 90 days. When you obtain a pre-approval letter, there will be a date on the top telling you when it expires.

A pre-approval letter expires because a bank needs to be up-to-date with your financial information. This includes your salary, assets, and debts. Three months is long enough for you to have left a job, taken on new debts, or spend what was in your account.

Keep in mind that even if you are pre-approved, it is likely that lenders will still want an updated set of pay stubs and bank statements around the time of closing.

If your initial commitment period has expired and you still haven’t found the right home, you’ll need to get an updated pre-approval letter from your lender. If you go to the same lender, it can be as simple as re-verifying your financial documents. Bring to your lender any updated pay stubs and bank statements. If nothing major has happened to your finances, you should be able to get a new pre-approval letter from your lender.

A lender’s request to review your credit report counts as a “hard inquiry.” Hard inquiries can lower your credit score if they’re a result of trying to open a bunch of new credit lines in a short time. But multiple hard inquiries as a result of rate shopping for a home loan generally don’t hurt your credit score.

FICO, one of the largest credit scoring companies, recommends confining rate shopping to a relatively narrow period, such as 30 days.

A mortgage pre-qualification is based on your estimated credit score and other details you provide the lender, such as the purchase price of a home you would like to buy, your down payment, your monthly debts and how you would want to structure your loan (length, fixed- or adjustable-rate interest, and so on).

With a preapproval, you complete a full application with supporting documentation, The lender pulls your credit report and score and puts an offer in writing to give you a loan at a given interest rate.

To get pre-approved for a mortgage, you’ll need five things—proof of assets and income, good credit, employment verification, driver’s license (or state issued ID), and social security number to pull your credit.  If you plan on having a co-borrower, they must also provide all of the above.