Is My Pre-Approval Still Valid?

After you start first start working with a real estate agent, pre-approval is the second step in the home buying process. Once you're pre-approved by a lender, your price range will be established so your agent can find you the right home.

But, pre-approval doesn't last forever and there are certain times where you may need to get pre-approved once again. Let's look at some occasions where you may need to get another pre-approval.

Time Frame

The main reason why your pre-approval may no longer be valid is simply due to the passage of time. And even though pre-approvals can last between 90 and 120 days depending on the financial institution, lenders typically want to see a pre-approval that's less than 90 days old. So if it's been longer than that, you may need to get a new one.

Employment Changes

Next, if you change employment you may need to get pre-approved all over again. Even if your new job pays the exact same or even more, lenders still like to see stability in employment.

If you're switching from a salaried position to hourly, or going from full-time to part-time work, that can also impact your pre-approval. And even if you stay at the same company, having a reduction in pay can also require you to get a new pre-approval.

Taking on a Lot of New Debt

If you incur any new major debts, that can also require a new pre-approval. For example, if you finance a new car or rack up some significant credit card debt, that can change your debt-to-income ratio. And if your DTI ratio exceeds the maximum allowed by the lender, you may need a new pre-approval.

Credit Score Changes

If your credit score drops significantly, or improves drastically, that can be reason to get another pre-approval. If your credit score has dropped a great deal, it may mean you now fall outside the lender’s credit score guidelines.

On the other hand, if your credit score has increased dramatically, you may qualify for a better interest rate, or loan terms. So getting another pre-approval could end up saving you money in the long run. Whatever you do, make sure to get a certificate of pre-approval from your lender, so you can have peace of mind that your financing is in order.

If you have any questions about whether or not your pre-approval is still valid, please don't hesitate to reach out to your lender. They will be more than happy to help you figure out what steps to take next.