The following information is provided to help you gather useful information while you're on the path to homeownership.
What's a FICO score?
As you receive and use credit, you develop a credit history that is "scored" by the three main credit bureaus. Each credit bureau determines your credit score according to an industry-standard methodology known as FICO, an acronym of Fair Isaac Credit Organization. The higher your FICO score, the more favorable your interest rate and other terms of the loan will be.
How can I improve my FICO score?
Make sure you pay your bills on time, improve your debt-to-income ratio, remain below your credit limit and pay off your debt rather than shuffling it around. In time, you will see your credit score improve.
Should I get pre-qualified or pre-approved for a home loan?
Absolutely. Getting pre-qualified and pre-approved for your loan is critical for many reasons. It can help you narrow your home search to save time, and help you get a clearer picture financially. It can give you a clearer picture of your finances, and help you narrow your home search to save time.
What are the tax advantages of owning a home?
The tax advantages of owning a home are substantial. Interest paid on your mortgage is deductible, which is especially significant during the initial years of certain loans because the majority of the monthly payment constitutes interest over principal. Interest paid on a home equity loan or line of credit may also be deductible, as are property taxes.
What are the advantages of owning instead of renting?
On the practical side, you're investing in your family's future with a proven strategy to build wealth. The tax advantages alone appeal to most homebuyers, as mortgage interest and property taxes are deductible. The potential for home equity is another highly motivating factor. Instead of paying rent to someone else every month, you're investing in your future. Homeownership also instills peace of mind, a sense of permanence and stability, and pride of ownership. Learn more about Renting vs. Buying.