A Pre-qualification is intented for a potential homebuyer to evaluate his ability to repay a mortgage. The process is relatively simple and fast. It involves a loan officer interviewing, either in person or over the phone, the potential home buyer with regards to his financial situation. Base on information provided by the homebuyer, the loan officer is able to determined how much of a mortgage loan the homebuyer can afford. It requires no actual financial documentations. A Pre-qualification differs from a Pre-approval in that the Pre-approval process is more in-depth and requires financial documentations, such as paystubs and tax returns, from the potential borrower.

You will also be given information such as the the interest rate the loan amount and the monthly payment.

A pre-qualification is based on preliminary information provided from consumer to broker. THe pre-qualification is not a commitment to lend, but merely a guide to what you can afford based on intial information such as credit and income.

The prequalification process is an important step in talking with your loan officer. It is the conversation where you discuss your income, debts, past credit and payment expectations. Your loan officer will tell you how all these things come into play for the different programs you may qualify for and an estimate of what payments fall within your price range based on the information that you give.

You can get a pre-qualification for a certian rate and have that change due to verification of documentation, such as employment status, income range or funds to close. It's very important to get your documentation to your mortgage broker as soon as possible so he move from the first step to the second (Pre-Qualification to Pre-Approval).