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How Can I Pre-Qualify for a Mortgage?

Applying for a mortgage is a significant financial decision, especially as a first-time buyer. Before making the move into home ownership, it is important to have a good understanding of your financial situation – and that’s where pre-qualifying can help.

Pre-qualifying for a mortgage is a crucial early step in the mortgage process that can help you to determine your budget and signal to lenders and sellers that you are serious about applying.

Find out how to pre-qualify for a mortgage and the benefits of pre-qualification in this guide. Then contact us about your mortgage goals to get started.

Mortgage pre-qualification calculator

Use First Merchant's “How Much Home Can I Afford” calculator for an initial indication of what size mortgage you could potentially secure.

This is not an official pre-qualification but will give you a suggestion of how well-positioned you are to afford different types of mortgages.

What is mortgage pre-qualification?

Mortgage pre-qualification is a basic review of your financial position to indicate how much you might be able to borrow if you apply for a mortgage. The lender will often confirm the outcome of the review by sending you a letter or document.

The information required for a pre-qualification review will include basic financial details such as your income, debts, savings, and credit score. Many lenders will perform a soft pull credit check to verify your credit score. But some companies, like First Merchants, will do a hard pull credit check.

Gaining pre-qualification does not guarantee that your mortgage application will be approved, but it is a strong indicator of your financial situation.

What should I do to get pre-qualified?

  1. Complete the pre-qualification form provided by your lender. This can often be completed online. The form will require general information about your financial situation (income, debts, etc.).
  2. The bank will conduct a credit check and will determine how much you might be able to borrow.
  3. Your credit score and financial situation will be assessed by your lender.
  4. You will receive a response quickly, sometimes in minutes via email. A pre-qualification letter may follow with more details, such as the estimated loan amount and projected interest rates.

Find out more about the mortgage process with our Mortgage 101 guide.

Pre-qualified vs. pre-approved: What is the difference?

Pre-qualification is typically a shorter and less detailed process than pre-approval – simply giving a rough estimate of how much you might be able to borrow.

In contrast, pre-approval is a more formal process that requires a hard pull (an inquiry that stays on your credit report) check of your credit score and verification of your income, assets, debts, etc. While this could impact your credit score, it provides a more accurate estimate of your chances of approval. This type of credit check does not guarantee approval either but is an important step towards getting a loan approval letter.

The speed of a pre-qualification review means that results can be almost instant but are less accurate. This makes pre-qualification ideal if you want to quickly assess your situation and estimate which mortgage loan option best matches your circumstances.

Soft pull credit check (typically)Hard pull credit check
Basic financial reviewDetailed financial review
Ideal for reviewing circumstancesFirst step towards loan application
Quick resultsMore time required to complete

Benefits of mortgage pre-qualification

It helps you to set a budget

The main benefit of getting pre-qualified is that you will have an indication of the type of homes that are in your budget. This will help you to identify properties to consider in a realistic price range.

It demonstrates intent to the seller

While it is not a guarantee of securing a mortgage, having pre-qualification in place demonstrates that you are serious about buying and are actively preparing to apply. This is attractive to sellers and agents, potentially adding weight to any offers you make.

It encourages a financial health check

Having your finances reviewed before making a mortgage application is a great opportunity to check your credit report for errors and make sure that your budget can also support the range of additional costs required to own a home (closing costs, tax, insurance, etc.).


How long does pre-qualification take for a mortgage loan?

Pre-qualification should not take longer than three days, though it is often much quicker, sometimes even minutes.

How long does mortgage pre-qualification last?

Pre-qualification with First Merchants lasts for 90 days, assuming there are no changes in your financial and credit conditions during this time.

Pre-qualification can be renewed if it is still required beyond the initial 90-day period.

Does pre-qualification affect your credit score?

Pre-qualification typically uses a soft pull credit check, which does not impact your credit score. This method provides a rough indication of how much credit you could apply for. A full credit check will be needed for preapproval. Confirm with your lender prior to submitting your pre-qualification application so you know what to expect.

When should I pre-qualify for a home loan?

Pre-qualifying should be considered as soon as you start looking to buy a house because it provides a strong indication of how much you could borrow, helping you to search for properties that are within your budget.

How can I use a mortgage calculator when pre-qualifying for a home loan?

Pre-qualifying is an important step at the beginning of the homebuying journey but if you want an initial indication of your situation, First Merchants provides a range of mortgage calculator tools including:

Get pre-qualified for a mortgage today

Begin the search for your next home with First Merchants’ free mortgage pre-qualification program. For more information, call us at 1.800.205.3464 or contact us.

Mortgage Loan Options