Try out our new website! Ryno Company
Friday, August 7, 2009 @ 3:26:00 PM - Written by ryan vaught
August 7, 2009

I found this great article from that does a great job explaining the difference between pre-approval and pre-qualification for a loan. 

Know Your Terms Before Looking for a Home

Before you begin house-hunting, it's best to know from your lender if you pre-qualify or are pre-approved for a loan. The distinction between the two is that pre-qualifying determines how much a lender will lend you. It involves obtaining a letter from the loan officer who looks at your debt ratios, gross income, and work history to see if you're qualified to make the monthly payments. This usually can take weeks while you wait for a pre-qualifying letter.

Pre-approval, on the other hand, takes it a step further and usually involves non-refundable fees. This process takes into consideration your credit history report, income verification, confirmation of down payment, and ability to pay closing costs. Once approved, the pre-approval letter lets the real estate agent and seller know you're qualified to negotiate terms.

Why you should maintain a good FICO score
Derived from your credit history report, credit scores are based on points you receive for being a good borrower. The most common scoring system used for mortgage approvals is done by the Fair Issac Corporation? (FICO?), which accesses the three main credit reporting bureaus (Equifax, TransUnion, and Experian.)

Credit scores can range from a low of 300 points to a high of 850. People with average credit usually score around 620, good credit at 660, and excellent credit above 720.



Someone with a credit score of 620 requesting a 30-year loan term for $215,000 may pay an APR of 7.60%. A score of 720 or higher would qualify you for a 6.00% APR (a difference of 1.60%) or a potential savings of $230 per month. Should your credit score fall below 620 then you're in the sub-prime mortgage category and your mortgage rate could go as high as 8.53%.

How to get the best rate
A good strategy for securing the best rate would be to clean-up your credit report at least six months prior to applying for a mortgage loan. Maintaining a debt-to-income ratio of less than 36% could boost your score by as much as 10%. Lenders like to see a history of long-term credit and ability to pay off a loan over time. The goal of any loan applicant should be to make sure their credit report is as accurate and sound as possible.

The lender should be able to provide you with a solid estimate of your closing costs and monthly payments. After you're approved, the lender will lock-in your rate for a specified period of time (usually 30 to 60 days).

You should always seek the guidance of a licensed professional before making any major financial decisions.

Article obtained from:

Take a look at my market report for today!

Currently Ryan has about 30+ listings in inventory, and has sold 23 homes in 2009. Please don't hesitate to contact me with any questions about Chico area real estate.

Interested in learning more about the Chico area or Ryan?
Vaught Properties: Chico Income Property
Chico Condos: Chico Condo Sales
Ryan Vaught: Ryan's Residential website
Chico Luxury Homes
Chico Investment Property

Ryan Vaught Real Estate
Keller Williams Chico CA
Office Phone: (530) 343-2959

·  Ryan's Current Listings
·  Chico MLS Search
·  Today's New Listings
·  For Sellers
·  About Ryan's Team
·  Why Ryan?
·  Commercial & Income Property

© Ryan Vaught Real Estate | | | | | |

Today's New Listings:

1001 WINDSOR WAY, CHICO, CA $220,000.00
  Residential 3 Bedroom 2 Bath Built in 2003   1124 Sq. Ft.
  Impeccably maintained home in convenient location! Close to csuc and enloe. Perfect for 1st time home buyer or a parent/student investor. Don't miss the retractable screen doo...

More information on 1001 windsor way
613 VICTORIAN PARK DR, CHICO, CA $239,000.00
  Residential 3 Bedroom 2 Bath Built in 1985   1250 Sq. Ft.
  Great location and a wonderful home with an open floor plan, living room with fireplace, high ceilings, fresh paint, and a large yard with wood decking.this darling home is co...

More information on 613 victorian park dr
70 HERLAX CIR, Chico, CA $255,000.00
  Residential 3 Bedroom 2 Bath Built in 2004   0.13 Acres  1357 Sq. Ft.
  Best buy in this price range. Tile floors, whole house fan, covered patio, nice rear yard landscaping, ceiling fans in all bedrooms and a great location in the avenues.

More information on 70 herlax cir
1487 HERITAGE OAK DR, Chico, CA $325,000.00
  Residential 3 Bedroom 2.5 Bath Built in 1998   0.11 Acres  1656 Sq. Ft.
  Come and be apart of this fabulous neighborhood. This home is close to Shopping, Walking distance to Bidwell Park. 1497 Heritage is set on one of the larger lots on the block....

More information on 1487 heritage oak dr
3165 HIDDEN CREEK WAY, Chico, CA $414,000.00
  Residential 4 Bedroom 3 Bath Built in 2001   0.19 Acres  2125 Sq. Ft.
  Amber Grove! This is the one you've been waiting for. Featuring 4 bedrooms, 3 baths, AND a bonus room. Move-in ready with beautiful new carpet and paint. The great room flo...

More information on 3165 hidden creek way
Listings Per Page: 5   10   20   50   All   Page of 1    Next Page »

Leave a Comment
Your Name:
Your Email Address:
(will not be shown)
Your Comments:
Enter the code exactly as you see it in the image:
Code Image - Please contact webmaster if you have problems seeing this image code Load New Code