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HOW LONG IS A MORTGAGE PREAPPROVAL GOOD FOR?
By the ZeroDown Team
October 31, 2022 / 5 minute read

How long is a mortgage preapproval good for?

If you are a first-time home buyer or are buying after a period of renting, the whole process can seem intimidating at first. There are numerous people to connect with and approvals you'll need to go through. Of course, the first one you'll need to consider is getting preapproved for a mortgage.

You may find yourself asking the following questions:

  • What is a mortgage preapproval?
  • How long does the process take?
  • When should I apply, and how long does it last?

In this post, we'll answer those questions and more in an overview of mortgage preapproval and how long your preapproval will last. This will help demystify the mortgage preapproval process, which will, in turn, help make the home-buying process easier.

Contents


What is a mortgage preapproval?
How long does it take to get a mortgage preapproval?
When should you apply for preapproval?
How long does a preapproval last?
How many preapproval letters should you get?
What's the difference between preapproval vs pre-qualification?
Key takeaways

What is a mortgage preapproval?

A mortgage preapproval is a document from a lender that states the amount of money the lender is willing to lend to a borrower. The preapproval is good for a previously agreed-upon amount of time.

Another way to look at a mortgage preapproval is as a dress rehearsal for your actual mortgage. It helps you and your lender determine the size of your loan as well as the interest rate you'll be eligible for.

Once your lender preapproves you, you'll then receive a preapproval letter. This will contain the following information:

  • Your mortgage amount
  • Your interest rate (which will vary depending on the state of the housing market)
  • Any additional details pertaining to the loan

The preapproval will be a useful tool for your real estate agent as they assist you throughout the buying process. It allows them to understand your budget while also assuring them you're serious about making this major purchase.

It also serves as a confirmation that you likely won't have any roadblocks arise later when attempting to get a mortgage. This is music to a lender's ears as they don't like unpredictable buyers. The preapproval lets them know they can expect smooth sailing after your bid is accepted.

How long does it take to get a mortgage preapproval?

The process of getting a mortgage preapproval can vary, lasting anywhere from days to weeks to months. While there’s no uniform amount of time, you can expect the process to take anywhere from 30-90 days. It's vital to have a realistic time frame in mind when working through the preapproval process. Purchasing a home is one of the biggest and most important decisions you can make. That's why it's natural to feel a bit of unease throughout the process, especially when it might be taking longer than you expected.

Luckily, no matter whether you get preapproved through Zerodown, a nationally recognized bank, or even a local one, the actual steps involved in receiving preapproval are relatively simple.

What usually happens is that the lender runs a credit check to determine your credit history. They'll also interview you, asking you a series of questions about your financial history. They'll also ask about the kind of home you want to buy and what kind of features or details you're looking for. These data points all help them make their determination.

When should you apply for preapproval?

Mortgage preapproval is one of the early cornerstones of this entire process. It's one of the first and most essential steps toward buying a home. You should apply for a preapproved mortgage beforedetermining which house you want to purchase.

That enables you to put together a more effective and realistic plan for purchasing your home. You minimize the number of surprises you run into and set the appropriate expectations for yourself. Then, when you come across the home you love that's within your budget, you'll always be ready to make a serious offer that sellers are more likely to accept.

Your preapproval comes with plenty of additional information you'll need, including:

  • Payment estimates
  • Interest rate
  • Down payment amount
  • Loan size

That isn't all you'll receive, but these are the most critical pieces of information you'll learn at this stage.

One major advantage of undergoing the preapproval process before selecting your dream home: it helps you better understand how much house you can afford. It's wise to do this before you start shopping - again, anything that limits surprises and helps you navigate this process is a positive.

While doing this step early in the process is important, a word of warning: make sure you apply for mortgage preapproval when you're actively involved in the home-buying search, just not too early. Because the preapproval doesn't last forever, receiving it too far in advance puts you at the risk of having it expire.

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How long does a preapproval last?

Let's say you've received your preapproved mortgage and are ready to take your search for a new home to the next level. You'll then want to learn how long your preapproval period lasts. In most cases, this time frame usually ranges anywhere from 60 to 90 days. That's not a hard and fast rule, of course - it will vary depending on your lender and any contributing factors based on your profile.

This is where effective communication with your lender is critical. Ensuring they clearly communicate how long the preapproval extends will help you gauge your time frame for finding your house. That's why you don't want to start your search too late. It's a balancing act, where you don't want to get serious about your search until after preapproval, but you do want to have a good idea of what you want and what you can afford.

A few things to be cognizant of during the preapproval period:

  • Your lender will run a credit check on you that may cause your credit score to go down.
  • Try to avoid making major life changes during this period that might affect your credit score. For example, taking on additional debt during this time period is not a great idea if you can avoid it.
  • Keep in mind that any major changes (job changes, amount of debt, other financial factors) all have the potential to slow the loan process from moving forward.
Apply for preapproval

How many preapproval letters should you get?

When it comes to getting preapproval letters, just how many should you be looking for? Will additional preapprovals assist you with the process? Should you stay with just one?

Yes, you can get multiple preapproval letters - but it's not ideal. Remember that every time you apply for preapproval, the individual lender runs a credit check on you. Lenders have to run that check to produce the letter, so you'll have multiple hard inquiries included within your credit report. Having multiple credit checks can be harmful to your credit score.

Having multiple preapproval letters might seem like a good path forward, but tread carefully. The harmful impact on your credit score may negate the positive impact of multiple letters.

One other detail to keep in mind: if you apply for preapproval with multiple mortgage lenders within a two-week window, you'll only get dinged for a single hard credit pull on your credit report. Of course, that then means you have to time them to occur close together, which can be difficult to pull off.

What's the difference between preapproval vs pre-qualification?

If you've been through this process before or even considered it, you may have also heard about something known as "pre-qualification." That differs from preapproval.

Pre-qualification refers to far less rigorous assessments of your background. A preapproval requires much more personal and financial information given to your prospective lender. The end result is that pre-qualifying offers may be less reliable than preapproval offers.

Key takeaways

The bottom line is that while the preapproval process can feel lengthy at times, most preapproval letters last anywhere between 60 to 90 days. Knowing this will help you customize your search to fall within this window after preapproval.

The recommendation? Wait until you are ready to actively search for your new home before you receive preapproval. Have your personal and financial information ready to share. If you apply for preapproval well before you've even started your search, you may find yourself scrambling to find the right house within the window offered in the preapproval letter.

The last thing you want to do during the home-buying process is rush to meet a deadline. By understanding how long the time frame is for preapproval and adjusting your search accordingly, you maximize your ability to find the right house for you.

Apply for preapproval

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