A mortgage prequalification is an informal assessment that tells you how much you may be eligible to borrow. It’s based on your finances and creditworthiness. It’s "informal" because it doesn’t require paperwork or documented information to prove your situation, like a pre-approval would. It’s useful especially for people who want to know whether they’re financially ready to buy a home, and how much they could potentially afford. To learn more, see our home loan checklist.