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 ?
The Georgia Department of Transportation (GDOT), hereinafter referred to as GDOT or the Department, is seeking proposals from prequalified firms interested in providing Geotechnical Laboratory Services Services.
Rail contractors from Spain, Italy, China, Turkey, South Korea, Germany, and France are among a dozen groups that are understood to have been prequalified by Oman Rail to compete for construction contracts to implement the next three segments of its National Railway Project.
Oman Oil Refineries and Petroleum Industries Company SAOC (Orpic) has prequalified 19 bidders for the proposed $3.
A list of prequalified companies will be announced in April this year and the government should ink a first agreement by February 2014, Bassil said.
But the government Tender Board has now invited prequalified engineering consultants to bid for the design engineering package, marking arevivaloftheambitiousproject.
Oman's Power and Water Procurement Company (OPWP) has prequalified six international companies as developers for the 2,000MW independent power project (IPP) at Sur, according to a report by the Times of Oman.
RIYADH: Saudi Arabia's oil ministry said yesterday it had set March 7 as the deadline for prequalified companies to present detailed proposals to build an export refinery in Jazan.
Shell says it has made the selection and will notify prequalified companies when it issues the tender.
In the clean-up, for example, the city was able to motivate people by having bids only for prequalified contractors.
The winner will be determined after consultations with the prequalified firms.
Expo activities continue today with a trade show, seminars and a procurement pavilion that gives prequalified Latino vendors a chance for face-to-face contact with corporations that can give them contracts.
The problem is that the IFIAC majority would authorize the Fund to lend only to countries that have prequalified for its assistance by meeting a series of criteria related to the stability of their domestic financial systems.