Pre-Qualification begins your loan process. During pre-qualification, you will gather information on your income and debts and give it to your loan officer. Once the loan officer has this information, they can begin to assess how much the borrower should qualify for when purchasing a home. If the borrower is considering multiple different loan programs, they should get pre-qualified for each program, since down payment, credit and debt requirements differ between programs.
Being pre-qualified is not a full analysis on how much the borrower can actually qualify for, other factor may increase or decrease that amount when a more in-depth analysis is done later in the loan process. Some of these factors include: credit, length of employment, type of income, debt, liens or judgments, property type or condition, and other issues that come up during the approval process.