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Pre-Qualify / Pre-Approve

Pre-qualifying is a process whereby a mortgage professional informally determines the maximum amount an individual is eligible to borrow.

The mortgage advisor typically:

  • Reviews the borrower’s application and credit
  • Calculates the debt ratios
  • Confirms the borrower meets the chosen lender’s guidelines
  • Provides an informal list of financing conditions
  • Provides a rate hold for 90-180 days (this is optional)

A pre-qualification is different from a pre-approval.

A pre-qualification is quicker and the lender itself does not review the borrower’s application. 

With a pre-approval, the lender provides a rate guarantee on the assumption that the borrower meets its guidelines. The lender will often (but not always) review the application—in part or in full. 

In addition, pre-approvals sometimes involve a more thorough check of the borrower’s credit and documentation (by the mortgage advisor, not the lender).