Don't Let an Outdated Preapproval Cost You the House

A mortgage preapproval is one of the first things I ask buyers about, and one of the easiest things to let slip. Getting preapproved feels like a box you check once. But if your home search takes longer than you planned, an outdated preapproval can cost you the house you really want.

Why preapproval matters

A preapproval is a lender's written estimate of how much they're willing to lend you, based on a review of your credit, income, assets and debts. It tells you what price range makes sense before you fall in love with a home, and it tells sellers that you're a serious, qualified buyer.

In a competitive situation, a strong, current preapproval letter can make your offer stand out. A stale one can make a seller hesitate.

Preapprovals don't last forever

A preapproval is a snapshot of your finances at one moment in time, so lenders put an expiration date on it. Depending on the lender, it's often good for about 60 to 90 days. After that, the lender will want to take another look.

A lot can change in a few months:

• Interest rates move, which changes your monthly payment and how much home you can comfortably afford.
• Your finances change. A new car loan, a job change or a big purchase on a credit card can all affect your approval.
• Your plans change. Maybe you started looking at condos and now want a single-family home with a yard, or you've shifted to a different part of the Triangle.

How to keep your preapproval working for you

• Check the expiration date as soon as you get your letter, and put a reminder on your calendar a couple of weeks ahead.
• Stay in touch with your lender while you shop. If rates move or your target price changes, ask them to update your numbers.
• Hold off on big financial changes. Try not to open new credit, take on new debt or change jobs until after closing, and talk to your lender first if something can't wait.
• Ask for a letter that matches your offer. Many lenders can issue a letter for the specific price you're offering, so you're not showing a seller your full budget.
• Keep your documents handy. Recent pay stubs, bank statements and tax returns make a refresh quick and painless.

Don't let paperwork slow you down

When the right home hits the market, you want to be ready to move quickly and confidently. A current preapproval means one less thing standing between you and a strong offer.

If you're thinking about buying in North Carolina, I'd love to help. I can connect you with trusted local lenders and walk you through every step. You can also search homes for sale anytime.

Source and further reading: “Don't Let Outdated Preapproval Add to Your Home Search Woes”, originally published by NerdWallet, via Trending Home News.