After receiving mortgage approval, you have a limited amount of time to pull off your home purchase or refinance. Approval expiration varies by lender and loan type: Conventional, Veterans Affairs and Federal Housing Administration loans have different expiration rules. As a rule of thumb, the approval expires when credit, income or appraisal documents expire or change. After that, the lender revisits the loan file and requests updated paperwork for a new approval.
Your lender specifies the expiration date or validity period for your loan approval, also known as a preapproval or loan commitment when it generates the letter. An approval is typically good for 30, 60 or 90 days. Your loan must close before the approval expires, or the lender will rerun the numbers and require updated supporting documents to ensure you're still eligible. Changes in your income, assets, credit score or monthly debt can affect the maximum loan amount you qualify for.
Your lender may ask for updated pay stubs and bank statements during the mortgage approval's validity period. For example, your lender may request new documents for the past 30 days after 60 days of being approved to make sure nothing has changed. Thirty days later, on a 90-day approval that has expired, you'd need updated paperwork to generate an entirely new approval. Taxes returns and W-2s are less time-sensitive because they cover the previous two years of income, which can't change.
Credit reports expire after 90 days. Many lenders take an additional measure to ensure you haven't racked up more debt, missed payments or diminished your score regardless of the report validity period. Fannie Mae requires conventional lenders to re-pull your credit scores just before closing. Non-conventional lenders may also check your credit at the last minute. Negative changes to your credit require the lender to withdraw your loan approval if you no longer meet minimum guidelines or revise the approval accordingly.
Appraisal reports are valid for 120 days. It may outlast your loan approval and can be used after the lender generates a new loan approval. Appraisers use comparable sales near the home you want to buy or refinance that have closed within the past three months. If you haven't closed on your home loan after 120 days, the lender must order a new appraisal, and the results can change your maximum loan amount. Lenders base your loan amount on a percentage of the home's appraised value and your debt-to-income ratio.
- HUD: FHA Mortgagee Letter 2009-30: Appraisal Validity Periods
- PBM Wholesale: FHA Guidelines: Documentation Requirements
- VA Home Loan Centers: How Long Is a VA Appraisal Valid?
- Fannie Mae: Miscellaneous Underwriting, Eligibility, and Property-Related Updates: Age of Credit Documents
- Bankrate.com: Documents You Need to Get a Home Mortgage
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