Before you buy a home with the help of a lender, you’ll have to earn mortgage pre-approval from a broker. This agreement essentially shows that you’re a serious buyer and meet all of the financial requirements to secure a home loan. However, your pre-approval does come with an expiration date.
This might leave you wondering, “What happens if my mortgage pre-approval expires before I buy a home?” Discover the answer in this helpful guide from the experts at Champions Mortgage. We’re a reliable source for anyone seeking a home loan or cash-out refinance in Texas.
What Is a Mortgage Pre-Approval?
The first step for anyone looking to buy a house is to get pre-approval from a lender. Brokers must abide by all mortgage laws and regulations while working with prospective homeowners and will grant a loan pre-approval after looking at someone’s financial information, including:
- Bank statements
- Outstanding debts
- Pay stubs
- Tax returns
Brokers will also look at your credit score, which helps determine a lender’s confidence in giving you a loan. After you go through the pre-approval process, you can start to look at homes and put in offers so that sellers know you’re serious and able to afford the real estate. Lenders outline the maximum loan amounts they’re willing to give based on your financial documents and credit score.
What To Expect After You Reach a Pre-Approval Expiration Date
Since lenders only issue mortgage pre-approvals to serious buyers, they come with an expiration date. A pre-approval remains valid for 60 to 90 days. If you’re approaching the expiration date and wondering, “What happens if my mortgage pre-approval expires before I secure a home?” you could expect the following scenarios.
Potentially Higher Interest Rates
You can lock in a certain interest rate when a lender approves you for a mortgage. If you don’t buy within the validity period of your approval, that locked-in rate also expires. You may end up securing a higher rate, which means higher monthly mortgage payments.
You Start the Process Again With New Paperwork
If the idea of gathering multiple financial documents stresses you out, you don’t want to ask a lender, “What happens if my mortgage pre-approval expires?” You’ll have to seek pre-approval once again, only this time with updated financial information. This means using any new tax returns as well as your most recent bank statements and pay stubs.
A Longer Delay of Buying a Home
Going through the pre-approval process a second time means that it’ll take slightly longer before you end up in your dream home. You must go through this necessary process before you can put in offers to sellers and show them you’re serious.
Other Factors Impacting Mortgage Pre-Approval
Now that you know what happens if mortgage pre-approval expires, it’s worth noting that the validity period can change. Lenders might lose confidence in you as a borrower if certain circumstances impact your finances. As a result, your mortgage pre-approval may end up expiring sooner than expected.
For example, if you lose your job and no longer have a steady income, lenders might change the validity period of your pre-approval. Sudden increases in debt could also have the same effect.
Contact the Local Lending Experts at Champions Mortgage
After reading this information, hopefully, you no longer have to wonder, “What happens if my mortgage pre-approval expires before I buy a house?” At Champions Mortgage, we’ll answer all of your questions about the home-buying process, including what it means to get mortgage conditional approval. You can navigate the process with ease, thanks to our professional brokers.
Reach out to Champions Mortgage today at (281) 727-2500 if you’re ready to buy a home and want to get approval for a loan.
