Definition: Evaluation of a prospective borrower's ability and eligibility to obtain financing. The lender considers relevant income, debts, credit, assets, and program requirements.
Example
A lender reviews a buyer's documents before determining the loan amount for which the buyer may qualify.
Keep the distinction clear
Prequalification, preapproval, and final approval are different stages. Qualification does not guarantee funding; property review and other conditions can remain outstanding.
Related terms
Underwriting · Credit (Closing Statement) · Loan-to-Value Ratio (LTV)
Keep studying
Mortgage Qualification: HER vs. TOR and PITI
References: CFPB: mortgage key terms
Pronunciation (US): kwah-lih-fih-KAY-shun (capitals show stress)
Pronunciation reference: Merriam-Webster
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