Mortgage preapproval is a crucial step in the homebuying process, indicating a lender’s willingness to provide a loan for a specific amount. It strengthens a buyer’s offer and streamlines the mortgage application process. Understanding the preapproval timeline empowers homebuyers to plan effectively and secure their dream homes efficiently.
Key Facts
- Timeframe: On average, it takes 7-10 days to get preapproved for a loan. However, this can vary depending on the lender and your specific situation.
- Required documents: To get preapproved, you will need to provide certain documents to the lender. These may include:
- W-2s or tax returns for the past two years
- Proof of income, such as pay stubs or bank statements
- Identification documents, such as a driver’s license or passport
- Proof of assets, including bank, retirement, and investment account statements
- Documentation of any outstanding loans or debts[3]
- Credit check: During the preapproval process, the lender will typically run a hard credit check to assess your creditworthiness. This check may impact your credit score temporarily.
- Additional factors: The time it takes to get preapproved can also be influenced by factors such as how quickly you gather the required documents, any mistakes on your credit report that need to be addressed, your employment status, and any unusual circumstances related to your assets.
Timeframe
On average, the preapproval process takes 7-10 business days [1]. However, the duration can vary based on the lender and the borrower’s financial situation [2].
Required Documents
To obtain preapproval, borrowers must provide the lender with the following documents [2]:
- W-2s or tax returns for the past two years
- Proof of income (pay stubs, bank statements)
- Identification documents (driver’s license, passport)
- Proof of assets (bank, retirement, investment statements)
- Documentation of outstanding loans or debts
Credit Check
During the preapproval process, the lender performs a hard credit check to assess the borrower’s creditworthiness [3]. This check may temporarily impact the borrower’s credit score.
Additional Factors
The preapproval timeline can also be influenced by:
- Promptness in gathering required documents
- Errors on the credit report that need to be resolved
- Employment status
- Unusual circumstances related to assets
Conclusion
Mortgage preapproval is a vital step in the homebuying process. The average timeframe for preapproval is 7-10 business days, but it can vary depending on the lender and the borrower’s financial situation. By gathering the necessary documents, understanding the credit check process, and considering additional factors, borrowers can streamline the preapproval process and position themselves for a successful home purchase.
References
[1] How Long Does It Typically Take to Get a Mortgage Pre-Approval? | CU SoCal (https://www.cusocal.org/Learn/Financial-Guidance/Blog/how-long-does-it-take-to-get-mortgage-preapproval)
[2] How Long Does It Take to Get Pre-Approved for a Mortgage? – Credible (https://www.credible.com/blog/mortgages/how-long-does-preapproval-take/)
[3] How to Get Preapproved for a Mortgage | Bankrate (https://www.bankrate.com/mortgages/pre-approval/)
FAQs
How long does it typically take to get preapproved for a loan?
**Answer:** On average, it takes 7-10 business days to get preapproved for a loan.
Can the preapproval process be completed faster?
**Answer:** Yes, some lenders may offer expedited preapproval options that can take as little as one business day. However, this may depend on the lender’s policies and the borrower’s financial situation.
What factors can delay the preapproval process?
**Answer:** Delays can occur if the borrower takes longer to gather the required documents, if there are errors on the credit report that need to be addressed, or if the borrower’s financial situation is complex.
What is the purpose of a mortgage preapproval?
**Answer:** Mortgage preapproval indicates to sellers that a buyer is serious about purchasing a home and has the financial means to do so. It also helps buyers narrow down their home search to properties within their price range.
Is a preapproval the same as a final loan approval?
**Answer:** No, preapproval is not the same as final loan approval. Final approval requires a more thorough review of the borrower’s financial situation and the property being purchased.
How long does a preapproval last?
**Answer:** Preapprovals typically expire after 60-90 days. If the borrower does not find a home within that time frame, they may need to reapply for preapproval.
Can I get preapproved for multiple loans?
**Answer:** Yes, borrowers can get preapproved for multiple loans to compare interest rates and terms from different lenders. However, each preapproval may result in a hard credit inquiry, which can temporarily impact the borrower’s credit score.
What should I do after I get preapproved for a loan?
**Answer:** After getting preapproved, borrowers should continue their home search and be prepared to make an offer when they find a suitable property. They should also stay in close contact with their lender to provide any additional information or documentation that may be required for final loan approval.