If you are on the journey of buying a house, the first thing that will pop into your mind is, “How much can I afford?” This is where mortgage pre-qualification can help you. One of the key reasons for getting a pre-qualification is that it helps to establish a budget. You will then be aware of what type of home you can buy and where you can buy it. This calculator will give you a practical view on how much mortgage you can qualify for.

What is pre-qualification?

To be clear, there are three terms involved in the mortgage process, they are pre-qualification, pre-approval and mortgage agreement. They are all different and should not be confused. This is about the initial stage.

Mortgage pre-qualification is an estimate of how large a mortgage you can afford based on your financial situation over the past few years.

It is a relatively simple process where you supply your lender with information about your financial situation including income, assets, and debt.

Why pre-qualify?

For serious homebuyers, the pre-qualification process is an important first step. But many first time home buyers are not aware of this. As lending guidelines have gotten stricter, it's crucial to know where you stand before setting your sights on a Mansion you just can't afford! Also, a pre-qualification shows your agent or broker that you are officially into the home-buying process and it gets their attention.

DIY Mortgage Pre-qualification

When you prequalify for a home loan, you’re getting an estimate of what you might be able to borrow.

  • It is based on information you provide about your income, assets, and debts
  • It is usually offered at no cost
  • Prequalification is neither pre-approval nor a commitment to lend; you must submit additional information for review and approval.

This should be an easy and quick process that you can do by yourself in minutes. You can do it without the need to go to the bank or lender saving yourself some time at this stage.

To assist you in estimating how large a mortgage you can afford, here is an example of a mortgage calculator you can use.