You’ve decided to make the leap and enter the real estate market as a buyer. You’ve been looking at homes online, the temptation has become too strong and you realize it’s time to hit the street and actually start looking at properties. Your Realtor almost immediately informs you that not only will she not participate in your search before she knows you’re pre-approved, but also that in this pandemic day and age, without a pre-approval letter no serious listing agent will even let you step foot in the home for a viewing. And so you reach out to your preferred lender and you get pre-approved for a mortgage. Now, how long will that preapproval be good for?
There are a few elements involved in the lifecycle of a pre-approval so let’s look at some of the ones that typically govern the validity of your profile and the day it may expire:
It’s safe to say that your credit report has a 90-day expiration. Even in cases where a lender will permit 120 days, we have to assume that a purchase timeline might be 30 days. Since it’s largely not in your control, you never want your credit report expiring while you’re in contract. At some point between 75 and 90 days, credit expiration becomes a material factor. Now, if the original credit pull has you with 800 FICO scores and you’ve done nothing that would jeopardize your strong credit rating, it’s highly unusual for your credit report to suddenly become an issue, but a re-pull is warranted if you think you may enter a non-contingent contract when you’re coming up on your expiration date.
Tax Filing Deadline
In 2020, the income tax filing deadline was July 15, but in most years, April 15 is the day by which you either need to file your tax returns or file an extension. If your pre-approval did not include this year’s filing and you’ve since filed your return (including e-file), your pre-approval must be updated accordingly.
End of Year
During January and February, most of us get our W-2 forms, our 1099s, K-1s and other year-end statements of earnings. All of these must be included in your file, so if your property search crosses the end of the year, your pre-approval would need to include the newly released information.
If you get a new job, your hours on your current job are reduced or changed, if you get divorced, buy a new car, etc., all of these events could impact your pre-approval. A good way to conceptualize your pre-approval would be to assume that anything that impacts your income, assets or credits could influence your mortgage application. Let us know when these things happen and we’ll make the necessary adjustments.
Your mortgage pre-approval is always a work in progress until you go into contract. We can make any necessary changes and advise on financial aspects in advance too. We’re here to help and ultimately our goal is to build and maintain and strong and ready file so that you have the best chance of winning your offer. We need your help to do that and we, in the industry, can all help by reminding you it’s not over until the keys are in your hands.
Best if used before,
Vice President of Mortgage Lending
Marin Office: 324 Sir Francis Drake Blvd., San Anselmo, CA 94960
Berkeley Office: 1400 Shattuck Ave., Suite 1, Berkeley, CA 94709
*The views and opinions expressed on this site about work-related matters are my own, have not been reviewed or approved by Guaranteed Rate and do not necessarily represent the views and opinions of Guaranteed Rate. In no way do I commit Guaranteed Rate to any position on any matter or issue without the express prior written consent of Guaranteed Rate’s Human Resources Department.
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