Pre-qualifying for a loan is a fairly simply process that can be accomplished over the phone by most lending institutions. When pre-qualifying for a loan, be prepared for the lending institution's representative to ask you questions about your income, savings and checking accounts, and debts. Once the representative checks your FICO score and is satisfied with the information provided, you will be told how much money the institution is tentatively willing to loan. Based on the pre-qualifying loan amount provided by the lending institution, the real estate agent can then help you find homes in the appropriate price range.

While pre-qualifying for a loan is a fairly straight forward process, once you find the home you wish to purchase, you must be pre-approved by a lending institution (though not necessarily from the lending institution that pre-qualified you). Lending institutions require more in-depth personal financial information before pre-approving a client for a loan. That is because pre-approvals are commitments to loan money while pre-qualifying a client does not entail a commitment on the part of the lender. While you wait for your loan approval, take the time to do a little research on the type of mortgage that best suits your financial needs and long-term goals.

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When You Don't Qualify For a Loan

If you didn't make it through either the pre-qualification or pre-approval process, you will need to fix the problem. Most problems that occur are the result of a low FICO score, poor credit, overextended finances, or erroneous information found on the credit report.

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