Mortgage preapproval is a lender’s cursory look at your finances to provide an estimate of how much of a home loan you could be approved for. Preapproval is an important step in the homebuying process because it’s as close as you can be to getting a mortgage without officially being approved.
Once you’ve been preapproved for a mortgage, you’ll receive a preapproval letter, which shows real estate agents and sellers that you’re serious about buying a home. It also informs your homebuying decisions by providing important information about your potential budget.
Understanding the mortgage preapproval timeline helps you avoid delaying your homeownership goals, minimizes your homebuying stress, and can make the process go more smoothly.
- You should get preapproved when you’re ready to start seriously shopping for homes, but not so early that the preapproval letter expires before closing.
- The mortgage preapproval timeline will depend on several factors, including your lender, how long it takes to gather the necessary documentation, and how long it takes to check your credit.
- There are several tips you can follow to speed up the mortgage preapproval process, such as preparing the necessary documents beforehand and completing forms in a timely manner.
Mortgage preapproval typically takes one to three days. However, this will vary depending on several factors, such as how long it takes to gather the necessary documentation, whether you check your credit check online or through the mail, and how the mortgage lender verifies your finances. The timeline also will vary depending on the lender.
When should you get preapproved?
If you’re planning to buy a home in the next two to three months, you should seek preapproval.
Many people get preapproved once they’re ready to start seriously looking for homes, though getting preapproved early can ensure that any pending corrections or missing documents are addressed before you close on the home. Closing is a busy part of the homebuying process, so making sure your finances are in order early on means there will be one less thing to worry about.
While getting preapproved early can be a good idea, if you expect your finances to change, it may be worth waiting until those changes happen. Changes in your financial situation between the time you get preapproved and officially approved could affect the amount you’re approved for.
It’s also important that you don’t get preapproved too early, since preapproval letters expire after a certain amount of time. After it expires, you’ll need to get preapproved again.
How long does preapproval last?
How long a mortgage preapproval lasts will depend on your lender. In most cases, your preapproval will be good for 30 to 60 days. During this period, you can show your preapproval letter when you make an offer on a home to demonstrate to the seller that you’re likely to secure funding.
Many real estate agents might not work with you until you have a mortgage preapproval letter. It informs the price range of your home search, strengthens your offer, and helps you compare mortgage offers. Preapproval shows sellers that you’re a serious buyer because you’re likely to get financing to close on their home.
“A preapproval gives you a clearer picture of how much you can borrow and helps you determine your budget when shopping for a home,” says Boyd Rudy, a Realtor and owner of MiReloTeam powered by Keller Williams Professionals, a real estate franchise company based in Plymouth, Michigan. “It also shows sellers that you are a serious buyer and increases your credibility when making an offer.”
Here’s roughly how long mortgage preapproval takes. The following timeline involves approximations, so it’s best to ask your lender what your specific time frame will look like.
Some homebuyers have their financial documents easily accessible. Others need some time to sort through cabinets and wait for financial institutions to respond to their requests for documentation.
Some documents you may need to get preapproved include:
- Business or personal tax returns.
- Recent pay stubs.
- Bank statements.
- Statements from investment or retirement accounts.
- Profit and loss statements (for those who are self-employed).
- Identifying documents such as a government ID and Social Security number.
You’ll want to check your credit score so you understand your chances of getting preapproved. Your credit score also affects your mortgage rate. To get your score, you can check your credit card statement or log in to your account, sign up for a free credit score service, or work with a government-approved credit counselor.
To see what factors may be affecting your credit score, get a copy of your credit report from the major credit bureaus — Experian, TransUnion, and Equifax. If you request your credit report at AnnualCreditReport.com, you’ll receive it immediately. However, if you request over the phone or by mail, then your credit report typically will be sent within 15 days.
Once you’ve applied for preapproval, how long it takes to get your letter depends on several factors. During this time, the lender will review your finances to determine your creditworthiness. The lender also will conduct a hard pull on your credit. Depending on your situation, the process may take up to 10 days, since the lender will need to verify all the documentation you provided.
Getting preapproved can be a fast process, though there are different factors that could affect your timeline, including:
- How long it takes to gather the necessary documents. The sooner you can submit all the documents needed, the sooner the lender can start processing your application. If the lender needs to keep asking for additional documentation, then the timeline can take longer.
- If there are any errors on your credit report. Those who have issues with their credit that require further investigation may face a slower preapproval process.
- If you are self-employed. The more information the lender has to verify, the longer it could take to preapprove you.
- Unusual circumstances with your assets. Lenders may require additional documentation if there are transactions related to your assets — like a brokerage account — that warrant further investigation. There could also be other situations where more explanation is needed, like if you own international property.
- The lender’s current workload. How busy your lender is may influence how quickly it can review and approve your application. Some lenders are more efficient than others, so it’s worth considering their reputations and responsiveness when choosing one.
If you want to start touring homes as soon as possible, here are some tips to expedite the mortgage preapproval process:
- Have your documents prepared beforehand. The sooner you can submit all required documentation, the sooner the lender can start processing your application. Having what you need before you even fill out the application will help.
- Complete and return forms in a timely manner. Lenders may need more information before they can give you a preapproval letter. If a lender requests more information, aim to submit it as soon as possible.
- Know your credit score. The more insight you have into your credit situation, the more likely you are to understand what you could qualify for. Knowing your situation also can help you target lenders that tend to work with borrowers who have similar credit profiles.
- Find lenders with speedy preapproval times. When shopping around for lenders, check for customer feedback or testimonials — ideally from reputable third-party websites — that offer a glimpse into how fast a lender processes applications. Finding one that typically offers faster preapproval times can help you get a letter that much sooner.
If you get preapproved for a mortgage, that’s great news. Now you can move on to the next steps in the homebuying process:
- Finding a real estate agent. If you haven’t already done so, it’s time to look for a real estate agent to help you with your home purchase. Take the time to get recommendations from people you trust, and interview a few before choosing the one you want to work with.
- Shopping for homes. Sit down with your agent and discuss your ideal home features and the locations you want to look at. Then, schedule time to tour homes.
- Making an offer. Once you find a home you love, you can work with your agent to make an offer. Some factors to consider before deciding to offer above or below list price include any contingencies you want to add and the purchase price.
- Signing the purchase and sale agreement. Once the seller agrees to your offer, it’s time to sign a purchase and sale agreement and begin the closing process.
- Mortgage underwriting. At this stage, you’ll go to your lender to finalize your home loan. Your lender will verify all your financial details before originating your mortgage.
- Closing on the home. After all the contingencies are met — including securing the mortgage — you can officially close on the home. Once you sign your closing documents and receive the keys, you’re ready to move into your new home.
Here are answers to frequently asked questions about how long mortgage preapproval takes.
You can get preapproved by multiple lenders, though it’s not necessary. Preapproval from a lender doesn’t mean you’re committed to getting a mortgage from that lender, so you can still shop around later on to find a loan that best suits your needs.
Due to the hard inquiry, a preapproval may negatively affect your credit score — but the effect is temporary. Depending on your credit, it may not have a huge impact on your score.
Pre-qualification is done earlier in the homebuying process and is based on self-reported financial information, whereas preapproval involves a more rigorous verification process and offers conditional mortgage approval. Both pre-qualification and preapproval are estimates of how much a lender is willing to let you borrow.
“Pre-qualification involves a preliminary assessment of your financial situation based on self-reported information,” Rudy says. “It does not carry the same weight as a preapproval because it doesn’t always review your credit history, income, assets, and debts like a preapproval.”
Getting preapproved means a home seller will take your offer more seriously, since it shows that you have the ability to get financing. Though it could take some initial work to get a preapproval letter — especially if you have a complex financial situation — the effort can be well worth it. You can help speed up the timeline by getting all your documents ready and submitting them in a timely manner.