How long does a pre approval last

Getting pre-approved before shopping for a new home is a smart idea, but what if you don’t find the right home quickly? How long does that pre-approval last?

Pre-approval Defined

Before going out with a real estate agent to look for the perfect property, it is wise to get pre-approved with a mortgage lender. This means allowing the lender to run your credit and take a look at your income and assets to determine how much mortgage funding you qualify for. A pre-approval gives you a top number for your house budget to help define your search.

 It also gives you credibility with sellers as it shows them you are a serious buyer. Getting pre-approval does not mean that you are under contract with that particular lender, however. You can apply with a different lender at any point during your home search. The pre-approval letter essentially proves to sellers that you have the ability to secure mortgage funding.

How do I get pre-approved?

The process for pre-approval is simple and painless, especially if you compile the required documents ahead of time. Most lenders will ask for your social security number, proof of employment, most recent pay stubs and W-2s as well as current bank statements. And if you are being helped with your down payment, you will need to provide a gift letter. The whole pre-approval process only takes a day or two.

Pre-approval Time Frame

Most lenders will pre-approve you for 90 days, although some pre-approval letters are good for as little as 30 days. The time frame is limited because lenders qualify you based on your current financial profile. Things like your income, down payment or credit could change, especially over a six-month period or longer. So, they give you a fairly short window to protect themselves from additional risk.

When should I get pre-approved?

Since there is a shelf-life to pre-approval letters, its best to apply when you are truly ready to buy a home.  This will allow you to make full use of the letter’s duration.

What happens if my pre-approval has expired?

If you haven’t found the home you want within the pre-approval time period, you simply need to ask your lender for another letter. If nothing has changed in your financial situation, it should be very quick and easy. You may need to provide more recent documentation and have your credit pulled again. Some lenders do charge a fee for a pre-approval letter; be sure to check before you give the go ahead.

What’s the difference between pre-approval and being pre-qualified?

Perhaps you’ve heard of getting pre-qualified and are wondering if you should do that instead of getting pre-approved. Pre-qualification gives you just a general idea of whether you can qualify for a home loan and how much you can borrow. There is no documentation or credit check with pre-qualification, so it is all based on verbal information. That makes it less reliable and it is not a guarantee of financing. A pre-qualification letter will not give you the same clout with sellers as a pre-approval letter.

If you have been pre-approved and you have outshopped your letter’s window, don’t worry! All you have to do is ask for another and you can be back out there looking at more homes in no time.

If you’re ready to make your dream of owning a home a reality, you’ve probably already heard that you should consider getting prequalified or preapproved for a mortgage. It’s time to understand exactly what each of those terms means and how they might help you. And when you’re working toward a goal this big, you want every advantage.

Ready to prequalify or apply?

Homebuyer tip:

You may qualify to borrow more money than you are comfortable spending on a home. But that doesn't mean you have to spend more. It's a good idea to limit your home search to houses priced at an amount you can comfortably afford. Explore the mortgage amount that best fits into your overall budget by using Bank of America's Home Affordability Calculator.

What is mortgage prequalification?

Prequalification is an early step in your homebuying journey. When you prequalify for a home loan, you’re getting an estimate of what you might be able to borrow, based on information you provide about your finances, as well as a credit check.

Prequalification is also an opportunity to learn about different mortgage options and work with your lender to identify the right fit for your needs and goals.

What is mortgage preapproval?

Preapproval is as close as you can get to confirming your creditworthiness without having a purchase contract in place. You will complete a mortgage application and the lender will verify the information you provide. They’ll also perform a credit check. If you’re preapproved, you’ll receive a preapproval letter, which is an offer (but not a commitment) to lend you a specific amount, good for 90 days.

Homebuyer tip:

Expect surprises! Lenders look at every detail of your finances when granting preapproval. You might be asked about a car loan payment you made with a credit card, for example. Be prepared to answer lender questions as soon as they come up.

Getting preapproved is a smart step to take when you are ready to put in an offer on a home. It shows sellers that you’re a serious homebuyer and that you can secure a mortgage – which makes it more likely that you’ll complete your purchase of the home.

How long does prequalification or preapproval take?

Aside from their distinct roles in homebuying, prequalification and preapproval can take different amounts of time. Prequalifying at Bank of America is a quick process that can be done online, and you may get results within an hour. For mortgage preapproval, you’ll need to supply more information so the is likely to take more time. You should receive your preapproval letter within 10 business days after you’ve provided all requested information.

What information do I need to provide?

PREQUALPREAPPROVALIncome informationCopies of pay stubs that show your most recent 30 days of incomeCredit checkCredit checkBasic information about bank accountsBank account numbers or two most recent bank statementsDown payment amount and desired mortgage amountDown payment amount and desired mortgage amountNo tax information requiredW-2 statements and signed, personal and business tax returns from the past two years

Which is right for me?

First-time homebuyers are more likely to find that getting prequalified is helpful, especially when they are establishing their homebuying budget and want an idea of how much they might be able to borrow.

Preapproval can be extremely valuable when it comes time to make an offer on a house, especially in a competitive market where you might want to stand out among other potential buyers. Again, a seller will be more likely to consider you a serious buyer because you have had your finances and creditworthiness verified.

PREQUALIFICATION VS. PRE-APPROVAL COMPARISON

PREQUALPREAPPROVALBenefitsYou can start house-hunting knowing how much you might be able to borrowYou’ll be ready to make an offer with confidence—and gain a competitive advantageProcessProvide basic information to a lender and quickly get a prequalification amountAfter submitting documentation to a lender, you should receive a decision within 10 business daysDocumentationAnswer questions for this process, plus a credit checkProvide proof of financial details, plus a credit check

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