How long is a preapproval good for?
If you’re looking to make a move within the next three months, the first thing you should do is secure a solid preapproval. If you still haven’t found a house or none of your offers have been accepted after your first preapproval, your mortgage lender will be able to update your preapproval should you need it.
Overall, the first thing you should do when considering buying a house is get preapproved for a mortgage. The mortgage preapproval will help you understand how much house you can afford, makes you more attractive to sellers and will get you ahead of any potential issues that might arise when it comes to your ability to purchase a home.
Life Events That Impact Your Preapproval
If you’ve secured a preapproval, you are ready to start shopping for a house and making offers as you see fit. However, certain life events that take place after your initial preapproval can result in complications to your mortgage application.
Here are 5 things you should do your best to avoid after getting your initial preapproval:
- Applying for New Credit: Applying for a loan or new credit card or other similar lines of credit will impact your mortgage application, making your preapproval less reliable.
- Making Big Purchases: Your debt-to-income ratio is key in your preapproval. Major purchases can impact this and can complicate your mortgage down the line.
- Moving Large Sums of Money: Making any major bank transfers or deposits can delay the mortgage process.
- Co-Signing on a Loan: While it may seem like a harmless thing, co-signing on a loan is considered a debt for both parties and will impact your debt-to-income ratio.
- Quitting or Changing Jobs: Mortgage lenders need to see a reliable, long-standing income in order to get you the best possible mortgage for your situation. Changing jobs after a preapproval can result in a big delay.
Your preapproval is typically good for 60-90 days, but if you make any major changes to your financial situation after your initial preapproval, you risk slowing down the process drastically. It is always advised to make a home purchase when your financial situation is relatively stable.
On the other hand, life happens. If you are changing jobs or relocating, it is critical to keep your mortgage lender up-to-speed on your evolving situation. The better you communicate your needs and your timeline, the better your loan officer will be able to manage your mortgage application from preapproval to closing.