The short but perhaps unsatisfying answer to the question ‘how long does pre-approval take for buying a home?’ is that it varies from lender to lender. But before we go any further, let’s get our sights straight and find out what pre-approval means specific to the purchasing of property.
Pre-approval is a confirmation that a bank or lender is able to offer you a home loan. The lender evaluates your financial background to determine if firstly, they’re able to offer you a home loan and secondly, how much money they’re likely to agree to lend you.
Typically this process is for a mortgage but it can apply to any kind of substantial loan. Simply going through the process isn’t a guarantee you’ll actually get a loan, but it does give you an estimate of how much you could qualify for based on your income, credit history, debts, and assets.
So in this case, with a mortgage pre-approval, the lender reviews your financial documents like pay slips, tax returns, bank accounts, and credit score and decides how much they’re able to give you interim approval for. With this pre-approval, your lender will issue you a letter stating the maximum amount you’re comfortably approved for. Not only will this help you understand your budget and borrowing limit, it will also illustrate to agents and sellers alike that the bank has endorsed you as a serious buyer and not some clueless rube.
When applying for pre-approval, you generally fall into one of the following two categories:
If you fall into the first category, then how long pre-approval takes might be a very poignant question. Time is always of the essence.
Speaking of which...
If you’re tapping your watch pointedly or obsessively checking your phone, you probably just want a straight and immediate answer - like right now, or even yesterday! The unfortunate truth is that there isn’t a ‘one size fits all’ solution.
If you asked your bank or lender how long pre-approval takes, their answers would probably vary. For some, it could be as little as one business day, but the speed of turnaround will depend on your individual circumstances. Generally speaking, it will take a few days to a week.
if you want to hasten the process and give yourself the best chance of obtaining a swift and positive conclusion, make sure you’ve gathered all the relevant information before you submit. If this is giving you tax return vibes, that’s good! You should apply that same level of organisation to any application you make, especially if you’re interested in saving time. And what is time? Time is money - for everyone.
So get yourself organised and let that arrow fly. Hopefully you’ll hit the bullseye first time and not only swiftly qualify for, but also receive, your pre-approval.
How long pre approval lasts concretely is, again, lender specific, but it usually clocks in at around 3-6 months. Hopefully, once you’ve successfully gained your pre-approval you’re able to jump right in! But as the old adage goes, ‘all good things must come to an end,’ and you would be correct if thinking that pre-approval is one of these ‘good things’ with a finite lifespan. So to make use of your pre-approval it’s best not to dilly-dally.
You don’t need pre-approval to put in an offer on a property or to bid at an auction, but it’s still a really smart idea to have it.Knowing what to do before you bid is the best approach to buying at an auction, and if you’re planning on putting in an offer on a house without pre-approval, then it’s best to at least calculate your borrowing capacity before you do.But still, why not just cross that big financial question mark off your to-do list early? Now we know that pre-approval is a swift and painless exercise that’s beneficial to you as you search for a property, it might be your saviour when it comes to frenzied, stressful, last-minute scrambling. Having a firm and grounded position to shoot from is always pr
