The Fannie Mae 1999 Housing Survey states that about one-third of those going through the mortgage process had some difficulty. This doesn't mean they were denied a loan—just that it wasn't smooth sailing. Getting prequalified or preapproved for your mortgage can save you future headaches.

Prequalification is a process in which you speak with a loan officer (either online, face-to-face, or by telephone) and indicate the type and size of the loan you are seeking. You can get help at the Chase Mortgage Web site (mortgage02.chase.com/ noframes/frameset3.html). In this case, just complete the form and print your prequalification letter. If you contact a traditional mortgage lender and are prequalified, you'll receive a similar letter in the mail after several days.

To get prequalified, you usually need to provide information about your salary, any other income, your assets, and your debts. A prequalification letteris valuable when dealing with real estate agents and sellers because it illustrates that you are financially stable and likely to qualify for the necessary loan.

With online preapproval, loan underwriters examine the applicant's financial resources,income, and debt to determine if the mortgage isa good investment. A credit check is considered the foundation of this process. Before being preapproved for an online home loan, you may need to supply your loan consultant with the following information:

• W-2 forms from the last two years and profit and loss statements (if you are self-employed)

• One to two months' worth of pay stubs• Bank, brokerage, and related financial institution statements for the last three months

• Copies of tax returns for the last two years

Some lenders use the originals of these statements to verify your financial situation before they issue your online preapproval letter. This doesn't mean that the online preapproval process is lengthy. You can get online mortgage preapproval within 48 hours at many online mortgage lending Web sites. One example is PNC Mortgage (www.pncs.com.au/managing_your_money/first_ home/home_loans/48_hour_loan_approval.html).

The online prequalification process

More than 3,000 mortgage lenders are on the Internet. Many of their Web sites have online pre-approval and prequalification features for prospective borrowers. A preapproval or prequalification letter provides real estate agents and sellers with an estimate of how much you can borrow. To get a home loan preapproval or prequalification, keep in mind the following points:

• The amount of cash you have available for a down payment. Also, gather at least threemonths' worth of bank statements (checking,savings, brokerage accounts, etc.).

• The amount of cash you'll need for closing costs .

• Your current household income (wages,royalties, irregular income, etc.). Collect all your W-2 forms (at least two years' worth) andone month's worth of pay stubs. Self-employed individuals will need profit and loss statements for the last two years.

• Your job status (how many years you've been with your employer, your employer's address,and your job description).

• Your net worth (the amount of your assets andliabilities). You may want to include whole life insurance policies, the appraised value of collectibles, and other assets.

• Copies of tax returns for the last two years. (Tax returns often provide lenders with a wealth of financial information and may reveal unforeseen debt.)The prequalification process is different from the preapproval process. Online prequalification is usually a calculator function that provides a ball park loan amount. Lenders often require current creditreports that are "pulled" electronically. These credit reports usually cost $15 to $30 and are paid via credit card to the lender or broker. (If you are not approved for the loan, the fee is not refunded.)You can find a good example of an online loan pre-qualification tool at Accel (www.interest.com/accel/ pq-accel.html). The online prequalification form is easy to complete.

The disadvantage of preapprovals is that they disclose to the seller the maximum loan amount you are approved for. If your preapproval amount is sig nificantly higher than the amount of the house you are purchasing, the seller may counter your offer with a higher offer. One way to avoid this trap is to request a preapproval letter with a specific loan amount when you make your offer. Lenders can often act quickly when you need this type of letter;many lenders will fax the new letter to you within 20 minutes.

Comparing online preapproval and loan application forms

Usually, online mortgage preapproval forms are the"short form" of the lender's "long applicationform." If you find all the paperwork of getting a mortgage overwhelming, try completing the stream-lined preapproval form and forget about hassling with the lengthier online application form.

See for yourself by matching up online pre-approval forms to online application forms. Check out the following Web sites that offer loan application forms:

E-LOAN (www.e4oan.com) provides a program that includes a loan application .

Fair Oaks Financial Services (www.fofs.com) is an online mortgage agency

Keystroke, corn (www.keystrokenet.com/ mortgage/apply4loan.html) provides free prequalification evaluation of your loan application.

Mortgage Mart (www.mortgagemart.com) provides step-by-step instructions on how to complete the standardized form (it takesabout 30 minutes).

eMortgages (www.emortgages.com) is a helpful discount mortgage supersite.