Mortgage glossary
Pre-qualification
Definition: A pre-qualification is an early, informal estimate of how much a borrower might be able to borrow, usually based on self-reported income, debts, and assets rather than verified documents.
Pre-qualification is a quick starting point for someone just beginning to think about buying. It may include a soft credit check or none at all, and it does not involve reviewing pay stubs or bank statements.
It is useful for setting a price range and spotting issues early, but sellers and agents give it less weight than a pre-approval because nothing has been verified. When you are ready to tour homes seriously and write offers, move to a full pre-approval so your budget reflects documented numbers.
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Reviewed by Kyle Richardson, NMLS #863464. General information, not advice for your specific situation. All glossary terms
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