An evaluation of a potential borrower’s financial status to determine the size and type of mortgage available to him/her. An informal calculation to estimate the approximate amount of money a homebuyer can afford to spend on a home purchase. The pre-qualification compares the potential buyer’s income and assets to the buyer’s debts. A pre-qualification helps the realtor focus the home search on homes within a certain price range. A Pre-Approval is stronger as the lender has verified credit and income.