Can you think of one of the earliest and most important steps involved in getting a mortgage? If you guessed getting a mortgage pre-approval, you’re right.

You may think that getting a pre-approval involves mounds of paperwork and a deep inquiry into your financial situation. However, you might be surprised at how quickly you can get pre-approved for a home loan, especially with Morty. 

But what happens if you get sidetracked with other things going on in your life or let too much time go by before you shop for a home? 

In this article, we’ll go over the difference between a mortgage pre-approval and pre-qualification, the process of getting pre-approved and when someone should consider getting pre-approved to buy a home.

We’ll also answer the central question of this piece: “how long does a mortgage pre-approval last?” You’ll know exactly what to do if you let time get away from you (and don’t worry, it happens to all of us!).

What is a Mortgage Pre-approval?

Pre-approvals help borrowers learn the loan amounts a mortgage lender will lend them to purchase a home. When you undergo a digital online pre-approval process, like you can with a mortgage broker like Morty, you input specific information online so you can find out how much money you are eligible to borrow to purchase a home. You take this step before you can get an interest rate lock for a home. 

It’s important to note that a mortgage pre-approval does not ensure that you will automatically get a mortgage loan.

A number of things could change before you arrive at the final approval stage. For example, your financial situation might change — you might experience a job loss which would affect your borrowing eligibility. Another example: Your appraisal could come in low, which means that the professional appraiser who determines the fair market value of a home might find the market value less than the loan amount. A lender can’t lend out more money for a home than the home is worth. 

Mortgage Pre-approval vs. Pre-qualification

What is the difference between a mortgage pre-approval and pre-qualification? Many lenders use these terms interchangeably, which might confuse you if you’re new to buying a home. Let’s go over the differences between each term.

Pre-approval

Compared to pre-qualification, pre-approval is often seen as a more in-depth examination of your income, assets and credit.

The pre-approval itself states a maximum mortgage amount that you have been approved to borrow and how long the pre-approval will last. 

Finally, a pre-approval demonstrates how serious of a buyer you are. A seller might view you as a better purchasing candidate if you have a pre-approval letter in hand. A pre-approval could help you compete with buyers putting in cash offers or those who are making offers without financing pre-approval.

Pre-qualification

Pre-qualification is an alternative first step in the mortgage process. You can think of pre-qualification as the preliminary step to get an idea of how much house you can afford and what your monthly payment will be. However, a pre-qualification doesn’t analyze your financial situation quite as in-depth. You can think of it as a “quick glance” at your eligibility.

Just like a pre-approval, a pre-qualification doesn’t guarantee that you’ll get a loan. Unlike a pre-qualification, it usually doesn’t include a credit inquiry and doesn’t typically carry as much weight as a pre-approval.

How Long Does it Take to Get Pre-approved for a Mortgage? 

Morty can pre-approve you in minutes, provided that you meet certain eligibility requirements. You’ll just need to share a few details about your transaction and financial situation. Input the property address of the home you’re considering, confirm some details about the home such as  whether it’s a primary residence and the type of home it is followed by a few income and asset declarations and finally, authorizing a credit pull.

Morty will generate your pre-approval letter quickly, along with terms and conditions, so you can get your dream home search underway.

How Long Does a Pre-approval Last?

Due to the validity timeline of the credit inquiry, your pre-approval offer with Morty will expire after 90 days. Note: Every lender differs with regard to the exact number of days to get a pre-approval and how long it will last. You may want to consider getting your pre-approval approximately one to three months leading up to your decision to make an official offer on a home.

You can improve your financial situation to buy a home during the pre-approval period, though it would require you to reapply for pre-approval after you make those changes. 

You can do a few things to raise your profile before you get a pre-approval if you think you need to improve your credit or your debt-to-income (DTI) ratio before purchasing a home. The DTI ratio refers to how much debt you have in relation to your income. Check out a couple of ideas:

  • Check your credit and report mistakes. You can check your credit report at annualcreditreport.com for free once a year and reach out to the credit bureaus when you see mistakes on your report. For example, a credit bureau might report that you still have an outstanding balance on a loan, when in fact, you’ve already paid off that particular loan.
  • Improve your credit score. You can improve your credit score by paying down debt, paying bills on time, keeping credit card balances and other revolving lines of credit low and reducing the amount you owe on your credit cards.
  • Lower your debt-to-income ratio. First, calculate your debt by adding up your fixed monthly expenses, or payments that don’t vary each month. This can include rent, alimony, child support, student loan payments, personal loans and other recurring payments. Next, use the following calculation: Monthly Bills ÷ Gross Monthly Income (income before taxes) = DTI Ratio

Your gross monthly income can include your wages or salary, a pension, side hustle income, Social Security payment and/or other additional income you receive.

Note that you’ll need to get a pre-approval letter again if you do not end up purchasing a house within the expiration timeframe. However, if you decide to boot up your search again several months after initially applying, you can get started again with a pre-approval with Morty

What to Do if Your Pre-approval Expires

What should you do if your pre-approval expires? Simply get pre-approved again because you must get a new assessment after 90 days. Your lender or mortgage broker will ask for your financial information again for reassessment and then issue you a new pre-approval letter if you continue to meet eligibility requirements.

Watch Your Pre-approval Expiration Date

You may be pleasantly surprised to learn that it doesn’t take a ton of time to get a mortgage pre-approval or apply for a mortgage. Morty can send you a pre-approval in minutes. 

You want to take the first step toward pre-approval because it demonstrates how likely you are to get approved for a mortgage. A seller will view you as a more serious buyer when making an offer on their home.

You can improve your financial situation to buy a home during the pre-approval period, though it would require you to reapply for pre-approval after you make those changes. 

Consider improving your credit or your debt-to-income (DTI) ratio by checking your credit and report mistakes, improving your credit score and lowering your DTI ratio. 

Your pre-approval letter will indicate the expiration date of your pre-approval, so take note of that once you receive it.
Ready to learn more about mortgages? Let Morty enrich your homebuying experience and guide you through the mortgage application process. We cover mortgage insurance, closing your mortgage, refinancing your mortgage, interest rates and many other important topics for homebuyers just like you.