What is FICO® Score And Its Importance in Home Buying
Buyer confidence and high demand remain strong in New York Metropolitan area,while our local home inventory remains historically low. Purchasing a home is one of the largest financial decisions most will make in their lifetime. This is why a good Fico score is critical in the home buying transaction.
It’s common knowledge that your FICO® score plays an important role in the home-buying process. However, many buyers do not know what Fico score they need to attain to buy a home. It is now a great time to purchase a home but only if it financially makes sense for you to make the move. Interest rates are at an all-time low, but those interest rates are not available to all purchaser. Unfortunately, fear and misinformation often hold qualified and motivated buyers back from taking the leap into homeownership.
Credit scores have increase as an average over the last five years, but it is essential for you to monitor and get a copy of your credit report to see where you stand. If any mistakes arise then you can dispute the mistakes with the credit agencies. All this information and your credit scores can be received by going to freecreditreport.com
Once you have your credit report you can increase it by paying your bills on time, applying for more credit and maintaining a good record of borrowing and repaying credit received. A good credit report will allow you to apply for financing on a home purchase dependent on your income and the amount of down payment.
Many programs exist to allow you to enter the home buying market with a lower down payment. These programs like the FHA Loan or a VA Loan are also tolerant of a lower credit score, but you still have to look at the expense of closing and the monthly payments. FHA Loans have upfront fees and also monthly fees that increase your payment substantially each month. These programs can make it available for you to purchase a home, but you have to look at all the numbers and see if the purchaser makes sense or whether you should continue to rent and save for a larger down payment. Alternatively, you can look for an investment property or purchase a multifamily home where you can occupy a portion of the dwelling and rent the remaining part to assist you with your mortgage payments. You could also purchase a multi-family home solely to rent it to tenants and continue to occupy your rental apartments.