If you need to obtain a mortage loan to purchase a home, getting prequalified is your first step in the mortgage process.  This involves supplying a Lender with basic information regarding your debt, assets, and income. From this information, Lenders can get an idea of the mortgage amount for which you qualify.

Getting preapproved is the next step.  This involves completing a loan application and supplying the Lender with the necessary documentation to check your financial background and credit rating.   There is usually a fee for the application.   You will then be told the exact mortgage amount for which you are approved.

It is important to get prequalified before you start your home search.   The initial prequalification state allows you to discuss, with your Lender, any goals or needs that you may have regarding your mortage.  He/She can then explain your mortgage options and recommend the type that might be best suited to your particular requirements.