Borrowers often ask how long our pre-approvals remain valid. Our stock answer is that pre-approvals remain valid as long as the primary criteria we used to pre-approve the borrower remains the same.
The primary criteria includes a borrower’s employment, income, debt obligations, assets, and credit. If any of these criteria change, we need to know so we can evaluate the impact on a borrower’s qualifications and pre-approval.
If a borrower is marginal or “tight” with any of the above criteria, we like to re-evaluate the borrower every ninety days at least.
For example, if a borrower’s middle credit score is at or close to a cut-off point like 680 (jumbo financing) or 700 (HELOCs), we will want to make sure the borrower’s credit remains above the cut-off point by pulling a new report when necessary (credit reports in general remain valid for 120 days).
Similarly, if debt ratios are very tight and rates are increasing, we will want to run numbers again periodically to see how much the rate increases are impacting a borrower’s maximum qualifying amount.
Jay Voorhees at (925) 855-4491
Real Estate Broker, CA Bureau of Real Estate, BRE# 01524255, NMLS# 335646