Mortgage prequalification helps determine how much house you can afford by providing an estimated maximum loan amount from a lender. This informal process involves sharing your employment, income, and assets, with a soft credit inquiry to assess creditworthiness. Prequalification is different from preapproval, which requires documentation and a hard credit inquiry. If denied prequalification or offered less than expected, address the issues, improve your credit, or consider a lower-priced home.