You know that before you present an offer on a house today, you need proof that you either have the funds or a mortgage loan pre-approval.
In fact, in today’s “COVID world,” you may need to present such proof before even touring a Pittsburg home for sale.
Do keep in mind that your mortgage loan pre-approval has a limited life-span. If your home search is a long one, it may not be a valid indication that you will be given a conditional approval for your home loan. I say “conditional” because the lender will verify your employment, credit standing, and bank balances at least once and probably sevveral times between approving your loan and the actual closing.
Mortgage loan pre-approvals expire for a variety of reasons.
Credit reports generally have a 90-day expiration.
Income tax filings: Lenders want to see a copy of your most recent income tax report. Thus, if you haven’t yet filed the current year’s report and your search takes you past the filing date, you may need to have your records updated before the approval will be issued.
The end of the year: Lenders want to see your most recent W-2 forms, so if your search takes you past the end of January, they’ll expect you to furnish the previous year’s forms before approving your mortgage loan.
A rise in mortgage interest rates: Your pre-approval was based on interest rates at that time. If they’ve gone down, you’re in even better shape. However, if they’ve gone up, the purchase price you qualify for may have changed.
In addition, the pre-approval you have could prove to be invalid if you’ve failed to inform your lender of life events that affect your income, assets, or credit rating. This would include events such as being married or divorced, purchasing a new car, changing your employment, opening a new credit account, or co-signing a loan.
If your Pittsburg home search is taking more than a few weeks, check in with your lender periodically. Make sure that your pre-approval is still a good indication that you qualify for the home mortgage loan you want.
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