When pre-qualifying a borrower, which criteria do lenders typically evaluate?

Lenders typically evaluate credit score, income, and debts when pre-qualifying a borrower because these factors provide a comprehensive picture of the borrower's financial health and ability to repay a loan.

The credit score reflects the borrower's creditworthiness and past handling of debt, indicating risk levels to lenders. Income assessment helps lenders determine if the borrower has sufficient earnings to cover mortgage payments and other financial obligations. Evaluating debts allows lenders to understand the borrower's overall financial obligations and calculate key metrics, such as debt-to-income ratio, which is critical in assessing loan eligibility.

The other criteria mentioned do not provide sufficient insight on their own for lending decisions. Employment status, while important, does not encompass a borrower’s overall financial stability. Homeownership history can give some background but isn't a direct indicator of current financial capability. Education level is not typically a factor that lenders use in evaluating loan eligibility as it doesn’t directly correlate with a borrower’s financial situation or creditworthiness.