How Long is Mortgage Pre-Approval Valid?

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The best thing an Arizona home-buyer can do is get pre-approved for a home loan first.  Pre-approval gives buyers several advantages such as the price range they qualify for and uncovering hidden surprises early.

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How Long is Arizona Home Loan Pre-Approval Good For?

What happens when a pre-approved buyer does not find a home for  3 + months?   Does their pre-approval and pre-qualification form stay valid?  When does a pre-approval expire?

Based on the validity period of a credit report, home loan pre-approval is valid for 90 days.  Credit reports are valid for 90 to 120 days (depending home loan type).   In fact, a credit report has the longest shelf life of all the key home loan ingredients. For example, income and asset documents require updating after just 30 days.

When to Update Home Loan Pre-Approval?

A home loan pre-approval is good for as long as income, assets and employment remain the same as they were at initial loan application.  An AZ mortgage company uses a credit report for 90 days on an FHA/VA/USDA loan and for 120 days on a Conventional loan.   All other information (income, assets etc…) must be updated once a contract is entered into.

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The time to pull a new credit report is when a buyers initial credit report expires prior to their closing date.  When a borrower’s credit related info has changed (including but not limited to their credit score) their mortgage approval may also change.  In addition, when income, assets and or employment changes after an initial loan application and prior the closing date the original pre-approval is invalid.

When To Pull a New Credit Report?

New credit should be pulled immediately when original credit expires prior to closing.  Pulling a new report early reveals credit related changes early.  With regard to addressing credit challenges, sooner is always better.  A lower credit score, a late payment, an unknown judgment/lien can impact and even negate an existing mortgage approval.

Imagine pulling a credit report two days before closing and a collection shows.  Now imagine this drops the buyer’s credit score 65 points.   Two days is not enough time to recover.   Without having time to fix the score that client would likely have a higher interest rate.

Mortgage Pre-Approval is very important when shopping for a new home.  An up to date pre-approval prevents surprises and tells sellers your approval is up to date and reliable.

By Jeremy house

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