How long does pre approval last? What expires, what gets refreshed, and how to keep yours alive

How long does pre approval last?

There are two clocks. The first is the date on the letter. Each lender sets its own policy, and 60 to 90 days is common. The second clock is the one that matters for the loan itself: the age of the documents in your file.

Under Fannie Mae's Selling Guide, credit documents can be no more than four months old on the date you sign the note. That covers the credit report and your employment, income, and asset documentation, and it applies to both existing homes and new construction. When a file holds a series of documents, such as several bank statements, the most recent one is what gets measured. If something ages out, the lender must update it. Other loan types set their own document-age rules, so your loan officer will track the date that applies to you.

What gets refreshed when a pre-approval expires

An expired pre-approval is not a denial and it is not starting over. Your application and history are still on file. A refresh typically means sending the newest versions of the same documents and authorizing a new credit report.

• Your most recent 30 days of pay stubs
• Your latest two months of bank and asset statements
• A new credit report once the old one ages out
• New tax returns if a filing deadline has passed since you applied, which matters most for self-employed borrowers
• An explanation of anything new: a job change, a large deposit, a new account

Mortgage pre approval vs pre qualification vs underwritten approval

The CFPB points out that lenders use these words differently and that the label alone does not tell you much about the process behind it. What matters is what was actually verified. Ask your lender which column of this table your letter belongs in, and tell your agent, because listing agents ask.

Whatever it is called, the CFPB is clear that a pre-qualification or pre-approval letter is not a guaranteed loan offer. It is a statement of what the lender expects to be able to do based on certain assumptions, which typically include a satisfactory appraisal, clear title, and no material change in your finances.

Does pre approval hurt credit?

A pre-approval involves a hard credit inquiry, and a hard inquiry can lower a score slightly. FICO says that for most people one additional inquiry takes less than five points off, that inquiries only factor into FICO scores for 12 months, and that they stay on the report for up to two years.

Shopping several lenders does not multiply the damage. The CFPB explains that multiple mortgage credit checks within a 45-day window are recorded as a single inquiry. FICO notes that the window is 45 days in its newer scoring versions and 14 days in older ones, and that its scores ignore mortgage inquiries less than 30 days old. The practical advice: do your rate shopping in a tight window, ideally within two weeks, and do not let fear of an inquiry stop you from comparing lenders.

A refresh after your credit report ages out does mean a new inquiry. For most buyers the effect is small, and far smaller than the effect of opening a new credit card or financing a car mid-search.

What can void a pre-approval before it expires

A pre-approval describes a snapshot of your finances. Change the picture and the letter may no longer be true, even if the date on it is still good. Before you do any of the following, call your loan officer first. Many of these have a workable answer if we know in advance.

• Changing jobs, moving from salary to commission, or becoming self-employed
• Financing a car, furniture, or appliances, or opening new credit cards
• Missing a payment on anything that reports to the credit bureaus
• Moving money between accounts or making large cash deposits that cannot be documented
• Spending the funds earmarked for your down payment and closing costs
• Co-signing a loan for someone else
• Switching to a property type the letter did not contemplate, such as a condo, a multi-unit, or a home on acreage

Why a local pre approval letter carries weight in Crystal Lake and Appleton

When a listing agent in Crystal Lake or Appleton sorts through competing offers, the question is which buyer will actually close, on time, without drama. The name at the top of the pre approval letter is part of that answer. A letter from a lender the agent has never heard of is a piece of paper. A letter from a bank the agent has closed with before, with a loan officer who picks up the phone, is a reference.

Home State Bank has been in Crystal Lake since 1915 and approves, closes, and services its loans in-house, from the Grant Street headquarters and the Appleton mortgage office on Westhill Boulevard. Our loan officers can confirm to a listing agent exactly what has been reviewed, and because decisions are made locally, unusual situations such as self-employed income or a unique property get a considered answer. None of that guarantees an accepted offer or a final approval. It does mean the letter reflects real review by people local agents can reach.

How to keep your pre-approval current during a long search

If your search is running long, treat the pre-approval like a passport: renew it before you need it. Send updated pay stubs and statements as they come out, tell your loan officer when your price range or target towns change, and ask for an updated letter before a weekend of showings rather than on offer night. It is also worth asking whether the letter can be written for the amount of each offer, so you do not reveal your ceiling to the seller.