Cherry Creek Mortgage
Loan Process 13 March 2019

Mortgage Pre-Approval Explained

If you’re hoping to buy a home any time soon, this is a question which would be wise for you to ponder. You may receive the confirmation from a lender that you are approved for financing, but actually buying a home could be weeks or even months later. Therefore, you should know just how long you have until your pre-approval expires.

The length of time by which pre-approval lasts varies per lender, so it’s important you ask as soon as possible so that you’re not in the dark. Since your mortgage consultant is aware that buying a home takes time, your pre-approval will have a shelf-life, but not an indefinite one.

To clarify, pre-approval is essentially the confirmation that you can financially qualify for a mortgage. It will also open you up to what exactly your home buying budget is. Your mortgage consultant will need to see bank statements, pay stubs and even tax returns. They will simply be detecting what exactly your risk for a loan is. After having reviewed your information, your mortgage consultant will give you a letter stating their willingness to back you on a loan. This information will speak volumes to a realtor as they will be more willing to work with someone who is already pre-approved.

Once this process is complete, you may now feel the need to scramble in order to, either, find a home or purchase the one you have been eyeing. It goes without saying that you will certainly want to have your letter of pre-approval handy through this process. While there is no definite period of time for the validity of your pre-approval, the rule of thumb is typically it is valid for up to three months. This should give you plenty of time to find a home you love. Having your mortgage consultant recommend a realtor to you is a great route to take through this process. Good luck and get shopping!