Getting pre-approved for a mortgage is an important step in the home-buying process. But what happens when your pre-approval expires? It’s essential to understand this timeline and know how to handle it if and when it occurs. In this article, we’ll discuss the consequences of a pre-approval mortgage expiry and the steps you can take to stay on track for getting the home you want.
Pre-approval Expiration Consequences
Mortgage pre-approvals typically come with an expiration date. This is the period – often 90 to 120 days – during which your interest rates are locked, and then your pre-approval is no longer valid. Once your pre-approval expires, you may face some consequences, such as:
- Loss of locked interest rates: Mortgage rates fluctuate, and the expiration of your pre-approval means you could lose out on a favorable rate. This might lead to higher costs over the loan term.
- Changes in affordability: Without valid pre-approval, there could be uncertainty surrounding how much you can borrow. Which may impact your overall budget and the properties you can afford.
- Longer closing time: Reapplying for a mortgage pre-approval delays the home-buying process, resulting in prolonged closing.
Steps to Take When Pre-Approval Expires
Fear not – there are ways to navigate around an expired pre-approval. Here’s what you can do:
Renew Your Pre-Approval
Consult with qualified mortgage brokers in Ontario to renew your pre-approval. They can help determine whether your financial situation or mortgage rates have changed since the initial pre-approval and guide you through the renewal process. Plus, they might also be able to negotiate new interest rates and terms, helping you save money in the long run.
Improve Your Financial Situation
While you’re waiting for a renewed pre-approval, consider improving your credit score, paying off debt, and increasing your savings. These measures can lead to better loan terms and interest rates.
Reevaluate Your Search Strategy
If your pre-approval has expired, you may need to adjust your home search. Work with an experienced real estate agent to find properties that better align with your budget and requirements.
Stay on Top of Market Trends
Keep an eye on the housing market to stay ahead of any fluctuations that might affect your home-buying experience. This helps you determine the opportune time to renew your pre-approval.
An expired mortgage pre-approval can seem like a major setback in your home-buying journey. However, by following these steps and working with knowledgeable professionals, you can get back on track and find the perfect home within your budget. Keep calm, stay proactive, and remember that a little perseverance goes a long way in securing your dream property.