What to Do if Your Preapproval Expires

In today’s competitive seller’s market where housing options are limited, you’ve taken the proactive step of securing a mortgage preapproval as you embark on your journey to purchase a new home.

However, there’s something important to keep in mind: Your mortgage preapproval comes with an expiration date. So what’s your strategy if it expires before you finalize the deal?

Let’s dive into your available options.

Don’t panic — but do take immediate action.

There’s no penalty for expired preapproval. Simply contact your lender to determine what steps are necessary. Most of your information will already be on file, but you may need to update and resubmit pertinent financial documentation. Keep in mind that your initial preapproval amount may change with each subsequent preapproval.

Be prepared for potential credit report changes. 

As your financial situation changes (e.g., new debt, loss of income), so does what you can afford. Market fluctuations like rising interest rates can also impact your creditworthiness. To account for such changes, lenders typically limit the length of mortgage preapproval to 30-90 days.

If preapproval expires, why bother applying?

A letter of intent from a willing lender allows you to put your best foot forward on the road to homeownership. You know what you can afford — and so do sellers. This not only helps you streamline the search process but also gives you a competitive edge over less-qualified buyers.

Unlike prequalification, an estimate based on self-reported information, preapproval requires official documentation (e.g., pay stubs, tax returns). Lenders review your income, assets and credit history to accurately determine your debt-to-income ratio, creditworthiness and maximum loan eligibility. Sellers prioritize preapproved buyers because they know they’ve undergone a rigorous credit evaluation.

If you have questions about preapproval or need help navigating the loan application process, reach out today.