Prequalification

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Prequalification

The act or process of determining the approximate amount a borrower will be able to borrow before he/she actually applies for a loan. Prequalification looks at the borrower's current income and debt to make this determination. Prequalification is most common with mortgages. Because the borrower has not applied for the loan, it is not a guarantee of approval, but is rather an estimation. See also: Pre-approval.

Prequalification.

When you prequalify for a mortgage, the lender calculates the approximate amount you'd be able to borrow, based on your current income and debt.

Many lenders offer free mortgage calculators -- sometimes called prequalification calculators -- on their websites to help you estimate how large a mortgage you'd be approved for.

Since you don't complete a mortgage application or provide financial details, prequalification is not a guarantee, and simply helps you determine how much you should plan to spend on a home. But before you're approved for a mortgage, you'll have to go through the mortgage application process, including a credit check, and provide financial documentation.

References in periodicals archive ?
Prequalifications are invited for Consultant Services For The Feasibility, Design And Production Of Construction Plans For An Indoor And Outdoor Family Entertainment Center In Regional Park
According to the documents, the Department of Environment (Parks Division) issued a tender in the press on January 24, seeking applications for prequalification of bids and it received 150 applications and February 9 was declared cutoff date for prequalifications bids.
In a blatant violation of rules and regulations, the CDA Department of Environmental (Parks Division) has given contracts of maintenance of parks and the Islamabad Zoo worth Rs80 million to its favourites without prequalification bids despite the fact that it had received almost 150 applications in this regard.
According to sources and available documents, the staff of Parks Division did not undertake prequalification bids of the applications prior to issuing contracts and favoured the favourites, causing a loss of millions of rupees to the civic agency, which is reeling under financial woes.
However, no prequalification bid was held on the announced date and instead, Parks Division officials including Deputy Director Landscaping Eng Muddasir Pervaiz, Director Landscaping Rana Tariq and accountant Bashir secretly allotted contracts to some favourite contractors, causing a loss of millions of rupees to the CDA in terms of prequalification fee and other income.
Completed prequalifications must be submitted before 15:00 on 20 May, reports Musanada.
The Abu Dhabi General Services PJSC, or Musanada, is inviting fourth-, fifth- and sixth-grade building contractors to submit prequalification documents for consideration for future projects.
Contractors have to be licensed and classified in the field of building construction in Abu Dhabi, according to the prequalification advertisement.
All interested firms that wish to participate in the prequalification should collect the documents from Musanada in the Delma Complex, Second Floor, Airport Road and Delma Street intersection, Abu Dhabi.
However, loan officers who are already using the Internet to augment their personal service report that their loan transactions go faster -- faster prequalifications, faster approvals, faster processing -- you name it, and there are a lot fewer glitches, too