Pre-qualification
In general, to pre-qualify is about passing or meeting an initial criteria or requirements before getting other opportunities opened up to such a person.
Pre-qualification is a process whereby a loan officer takes information from a borrower and makes a tentative assessment of how much the lending institution is willing to lend them.
Basic process
The borrower is typically asked for their social security number or another identifier, together with proof of their employment, income, and assets, which is weighed against the monthly payments being made on their current debts. This provides a general picture of their creditworthiness. Based on this initial information, a maximum loan amount will be determined according to a standard Debt-to-income ratio (DTI). Final approval of the loan will require a credit report from a credit bureau
Mortgage
In a mortgage context, pre-qualification denotes a process that has not yet been
Other factors included in determining the buyer's pre-qualification status, besides the basic DTI issue, are: monthly
See also
- Loan
- Pre-approval
- Credit
- Mortgage loan
- Lenders mortgage insurance
Further reading
- The Handbook of Real Estate Lending, by Kathleen Sindell, Irwin Professional Pub. (c1996) ISBN 0-7863-0880-X