What happens when my pre approval expires?

Awesome, you’ve been pre-approved! Now the fun part starts, trying to find your perfect house. But did you know that your pre-approval only lasts a short time?

Most banks offer a pre-approval or Letter of Offer to a borrower and this usually remains valid for between 60-90 days. House hunting can take time, and sometimes the right property might not turn up straight away, so generally the bank will allow you to extend this pre-approval for another 60-90 days. Generally you won’t have to apply again unless your financial circumstances have changed, however you may need to provide a new set of pay slips or bank statements, depending on the bank. This process can be repeated for up to a year, when you will then need to fully reapply for pre-approval once again if you haven’t found a suitable property in that time. 

It’s a good idea to work with a mortgage adviser when it comes to a pre-approval as we can help you with the renewal process and managing the time frame extensions. In 12 months a lot can change, for both the borrower and the bank. Borrowers may find that when they go to renew their pre-approval that the bank's policies have changed and they may no longer be eligible for the same amount of lending or same terms. One example is if the interest rates rise significantly, and a borrower cannot meet the higher ‘stress test’ rates.  For this reason, it’s a good idea to begin to navigate the renewal process with plenty of time if you are still trying to find the right property. 

Working with a mortgage adviser makes getting a pre-approval much easier as we manage your pre-approval every step of the way and will remind you when it’s getting close to expiry. We can also help you renew the finance offer and navigate any changes to policy or financial circumstances that could come up.

If you are keen to get pre-approved so you can begin house hunting and know your budget, then get in touch with our Loan Market Queenstown mortgage advisers today. You can either call us on 03 441 1307 or get in touch with us online here.