How Long Does Mortgage Pre-Approval Take and What to Do If Denied
Getting a mortgage pre-approval letter typically takes between 7 to 10 days on average, though the process can be faster or slower depending on a few different things [source].
If you have already applied, read on to explore the timeline in detail and discuss what to do if the application is denied.
If you haven't applied and you're ready to tackle your mortgage pre-approval, take the first step toward homeownership with My Home Pathway's personalized guidance.
We'll help you organize your documents and boost your approval odds. Start your pre-approval journey today
Key Takeaways
Most borrowers hear back about their mortgage pre-approval letter in 7-10 days. Real talk though - your timeline could be shorter or longer depending on your lender's speed, how fast you get your docs together, and what they find when digging through your finances.
Missing documents like incomplete bank statements or slow employment verifications from HR can stall your pre-approval for days. Lenders need the full picture - even one missing page means hitting pause.
Got denied? Don't let it crush your dreams. Start by checking your credit report for fixable issues and knock out some debt if you can. Sometimes it's just about finding the right loan type - FHA or VA loans often work better than conventional ones for many buyers. Remember, plenty of homeowners got denied on their first try before landing their dream home.
The Typical Pre-Approval Timeline
The pre-approval process feels like it can take forever, especially when you are so motivated to buy a new home! But these things take time and follow a few steps. The mortgage pre-approval process generally follows these key steps:
Initial application submission: 30-60 minutes
Financial Document gathering and submission: 1-3 days
Credit check and financial review: 2-4 days
Final pre-approval decision: 1-3 days
Keep in mind, some lenders can provide a pre-approval letter sooner, it's wise to factor in a larger window to ensure you have ample time to make an offer after beginning your home search.
Common Delays in Mortgage Pre-Approval: What You Need to Watch For
Mortgage pre-approval process delays hit hard when you're ready to buy. Nobody likes waiting around for their mortgage pre-approval, especially when you've found your dream home.
The good news?
Most of these holdups aren't rocket science - they're simple issues you can prevent with a little heads-up.
Missing Financial Documentation
The number one pre-approval letter killer? Missing paperwork.
Bank forgets to include all statement pages
Tax returns missing schedules
Outdated pay stubs
Unsigned documents
Missing pages from W-2s
Smart homebuyers know that organizing financial documents early saves weeks of back-and-forth with lenders.
Incomplete Applications
Small oversights create big delays:
Skipped sections on applications
Missing contact information
Forgotten asset accounts
Unexplained gaps in employment
Unsigned disclosures
Employment Verification Delays
Your job matters more than you think:
HR departments are slow to respond
Self-employment documentation gaps
Recent job changes need an explanation
Commission income requiring extra proof
Bonus verification holdups
Getting pre-approved in a seller's market means having employment docs ready to go.
Complex Financial Situations
Some money situations need extra attention:
Multiple income sources
Self-employed business structures
Irregular payment schedules
Investment income verification
Trust fund or inheritance money
Multiple Property Ownership
Owning other properties complicates things:
Rental income documentation
Multiple mortgage payments
Property tax verification
Insurance cost confirmation
Maintenance expense records
My Home Pathway guides you through these complications, turning potential delays into quick wins.
Want to skip the common pre-approval headaches? My Home Pathway created a system that catches these issues before they slow you down.
Speed matters in the pre-approval process. Start your delay-free pre-approval journey
Pre-Approval Validity Period
Most lenders give you a 90-day window with your pre-approval letter. Some might cut it shorter to 60 or even 30 days, but here's a pro tip: don't grab that pre-approval letter too early [source].
You want those days to count when you're actually ready to hit the open houses and make offers.
Time it right, and you won't have to deal with the hassle of getting a new one mid-search.
Why Pre-Approvals Sometimes Lead to Denials
Common reasons for mortgage denials include:
Poor credit scores: Scores under 620 may lead to denial.
High debt-to-income ratio (DTI): Most lenders require a DTI of less than 50%. (can you make monthly mortgage payments) [source]
Limited employment history
Insufficient down payment funds
Recent major credit events
According to 2020 data, the overall mortgage denial rate was 16.1%, with Black borrowers experiencing the highest denial rate at 27.1% [source] There may be more challenges for some home buyers from underserved or immigrant communities but there is hope to get your approved.
What to Do After a Mortgage Denial
If your mortgage application is denied, take these steps:
Read the denial letter carefully to understand the exact reasons.
Request a copy of your credit report to check for errors.
Make a plan to address the specific issues cited.
Consider working with a mortgage advisor.
Look into FHA loans or other mortgage options.
Sign up for free with My Home Pathway and let us help you position yourself.
There's no set timeframe for how long to wait before reapplying after a denial. It depends on the reasons for rejection and how quickly you can address them.
How to Improve Your Approval Odds
To increase your chances of approval, focus on:
Building credit through consistent on-time payments
Paying down existing debts to lower your DTI (debt-to-income ratio)
Saving aggressively for a down payment
Maintaining stable employment
Getting professional guidance early in the process
The Importance of Pre-Approval
Getting pre-approved before seriously looking at homes can give you a competitive edge in hot housing markets. Some sellers may only consider offers from pre-approved buyers.
With a pre-approval letter from your mortgage lender in hand, your mortgage could potentially close in as little as two to three weeks after your offer is accepted.
Remember, the mortgage approval process typically takes 30 to 60 days on average, but it can be significantly shorter or longer depending on individual circumstances. Proper preparation and understanding of the process can make a substantial difference in your homebuying journey.
Frequently Asked Questions
1. How long does mortgage pre-approval last?
Most mortgage pre-approvals are valid for 60 to 90 days, but some lenders may have shorter or longer validity periods. It’s best to check with your lender to ensure your pre-approval is still active when making an offer. Be sure to check to see if you submitted all necessary financial documents.
2. Can I get pre-approved for a mortgage with a low credit score?
Yes, but it may be more challenging. Lenders typically prefer a credit score of 620 or higher, but FHA loans and other government-backed programs may approve borrowers with scores as low as 500-580, depending on other financial factors.
3. What happens if my financial situation changes after pre-approval?
If you take on new debt, change jobs, or experience a drop in income, your lender may reassess or revoke your pre-approval. It’s important to keep your financial situation stable during the homebuying and pre-approval process.
4. Can I apply for mortgage pre-approval with multiple lenders?
Yes, shopping around and applying with multiple lenders within a 45-day window won’t negatively impact your credit score, as credit bureaus treat these inquiries as a single event. This helps you compare rates and terms.
5. What should I do if my mortgage application is denied?
Start by reviewing the denial letter, checking your credit report for errors, and addressing the reasons cited by the lender. You may also explore alternative loan options like FHA or USDA loans or work with a mortgage advisor to improve your financial standing.
If you are still not pre-approved sign up at My Home Pathway to start your home buying journey.
Disclaimer: My Home Pathway is a technology-driven risk improvement platform. We are not a mortgage broker or lender and are not representatives of any home loan programs. We are not a credit repair company, HUD-certified counseling agency, or one-on-one home counselor. While we offer mortgage-related services, we are not a bank, non-profit organization, foundation, or real estate agency. We may partner with those organizations to provide content and access related to our services.
The information provided is for educational purposes only and should not be considered credit repair advice or housing counseling services. For credit repair assistance or housing counseling, please consult with appropriate certified professionals or HUD-approved agencies.
Fintech Founder at My Home Pathway. VC Backed Startup. Financial Inclusion Leader and Speaker.
Risk and project management professional with experience in Federal Reserve banking regulations, risk management policies as well as risk management advisory services. Critical skills include credit risk analysis, capital markets, strategic planning, current state assessments and target operating models. Ability to assess evolving regulatory guidelines and potential impact on financial services organizations operationally and strategically.
Mr. Johnson received his Bachelor of Science in Management and International Business from Penn State University where he was a Bunton Waller Scholar and Division 1 athlete and his MBA in Finance and Accounting from New York University.
