Pre-qualification
Are you in the market to buy a home, but you don't know how much you can receive from a lender? Are you holding reserve in submitting an application because you do not want your credit pulled?
Pre-Qualification Defined
What Is Pre-Qualification?
The term pre-qualification refers to an estimate for credit given by a lender based on information provided by a borrower. Pre-qualifications are conditional and involve the lender reviewing a borrower's creditworthiness before granting a pre-approval. Lenders generally use this as a marketing tactic for creditors seeking to obtain new customers, especially for things like credit cards and mortgages.
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KEY TAKEAWAYS
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A pre-qualification is an estimate for credit given by a lender based on information provided by a borrower.
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Pre-qualifications are conditional and involve the lender reviewing a borrower's creditworthiness before granting a pre-approval.
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Lenders generally use pre-qualifications as a marketing tactic for creditors seeking to obtain new customers.
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If a borrower decides to apply for a pre-approved deal, the creditor still needs to obtain a hard inquiry on their credit report.
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Texted source:,https://www.investopedia.com/terms/p/prequalification.asp