Real Estate Glossary > P > Pre-qualification Definition

Similar to pre-approval A letter from a bank or a lender estimating how much they'll lend a borrower. Getting pre-approved for a loan helps establish a price range and determines how much the borrower can afford. , pre-qualification is a more informal evaluation of a buyer's credit worthiness and gives her a rough estimate of how much she can afford to borrow. The main difference between pre-qualification and pre-approval is that the lender doesn't verify any information the borrower provides for a pre-qualification. Lenders will verify credit, income, employment and other assets when buyers get pre-approved.