What Is the Average Time to Get Pre-Approved for a Loan?

by Daria Kelly Uhlig ; Updated July 27, 2017
If your credit is up to snuff, you can have a pre-approval in less than an hour.

A mortgage pre-approval is a valuable tool for a prospective home buyer. You’re not ready to start looking at homes until you’re sure you can buy one and know how much you can spend. The pre-approval helps you in both respects. It also shows sellers you’re ready, able and willing to purchase. Although many buyers are pre-approved in 20 to 30 minutes, the process can take longer if your qualification is less clear.

Pre-Qualification

Pre-qualification, which is a relatively casual process that determines whether you’re a good candidate for loan approval, sometimes precedes a pre-approval. Pre-qualifications most often come from mortgage brokers. Brokers don’t loan money themselves; rather, they match borrowers with the lenders most likely to approve them. The broker asks you questions about your income, assets, debts and credit history. No credit check or documentation is required. The broker simply establishes a profile for you before contacting lenders for which your profile is a good fit. It’s up to the lenders to pre-approve you for a loan.

Pre-Approval

Although a pre-approval falls short of guaranteeing that you’ll be approved, the letter is your lender’s vote of confidence in your creditworthiness. Unlike the pre-qualification brokers issue based simply on your answers to questions, the lender orders a credit report and takes additional steps to verify your income, assets, debt and other factors that influence credit decisions before pre-approving you for a loan.

Time to Pre-Approve

Lenders use an automated process to pre-approve prospective borrowers. If your credit is solid and your income and debt are within the lender’s preferred range, you have a good chance of getting approved on the spot. If a low credit score or other problems flag your pre-approval application, the lender will evaluate your creditworthiness using a more in-depth, manual process. In this case, it could take a week or longer to issue your pre-approval.

Preparing to Apply for Pre-Approval

The earlier you prepare, the better chance you have of being pre-approved quickly through the simpler, automated process. Order a copy of your credit report as soon as you decide to buy a home. Contact the credit bureaus to correct mistakes, and work with your creditors to resolve such issues as past-due payments. In the meantime, try to pay down your debt and increase your cash reserves. Finally, gather the documents you’ll need for your application. These documents include W2 forms and 1099s, your last few years’ worth of tax returns and several months of pay stubs and bank and investment statements.

About the Author

Daria Kelly Uhlig began writing professionally for websites in 2008. She is a licensed real-estate agent who specializes in resort real estate rentals in Ocean City, Md. Her real estate, business and finance articles have appeared on a number of sites, including Motley Fool, The Nest and more. Uhlig holds an associate degree in communications from Centenary College.

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