Pre-approval Letter Expiration
A pre-approval letter is a conditional agreement that states how much of a home you are able to afford. It states that you qualify for a given loan amount at a given interest rate. Since mortgage rates change daily (or sometimes even hourly!), lenders often make the pre-approval letter valid for a certain period of time to lock you into a rate. Pre-approval letters are especially important in competitive markets, as it shows the seller you are serious and ready to buy.
How long is a pre-approval letter good for?
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.
Why do pre-approval letters expire?
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.
What to do if your pre-approval expires
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.