The process in which a borrower finds out how high of a home loan they may be approved for by a lender without verifying all financial documents.
Pre-qualification is the process in which a borrower finds out how high of a home loan he or she may be approved for by a lender without verifying all financial documents. Pre-qualifications base qualification on verbal statements from the buyer or minimal documentation.
Big banks typically complete pre-qualification. Since documentation is generally not reviewed for a pre-qualification, there is a risk that items will be uncovered during underwriting that may jeopardize the lending once in contract.
See pre-approval.