What an exciting time of your life! If you are about to take the
plunge and consider purchasing your first
home, congratulations.
But how do you decide if the time is right? Your first stop should
be your credit union. Many people begin their adult lives renting
an apartment or home, and renting certainly has its place. But when
Fannie Mae (the Federal National Mortgage Association) did a survey
recently, 80% of those responding to the survey related that they
wanted to own a single-family home with a yard as the ideal place
to live. The American Dream, right?
Debt Consolidation And Credit Well, usually. For many years, the United States tax code has
rewarded homeowners with significant tax breaks for home ownership.
If you do the math regarding deductions, you will find that the
federal government actually picks up $280 for every $1000 you spend
in mortgage interest and taxes if you are in the 28% tax bracket
(as many home owners are). So it's important that you take a hard
look at whether or not that higher mortgage payment actually is
"higher" once you factor in the tax benefits. So how do you figure
this out? Make an appointment with your credit union. Your credit
union is there to assist and support you in making financial
decisions, a particularly valuable partnership for you if you are
new at this. So use the resources available to you there.
Credit unions exist not only worldwide, but also in each of the 50 U.S. states. By definition, a credit union is a cooperative financial institution that is owned and controlled by its members. Credit unions differ from banks and other financial institutions in that the members who have accounts in the credit union are the owners of the credit union.1 Some experts say that about one half of the nation's credit unions offer secured credit cards to members, many of which may offer lower interest rates.2
Check Credit Rating Sometimes, even when considering the associated tax benefits,
home ownership may still seem beyond the reach of first-time home
buyers. Actually, half of those currently renting their homes or
apartments are renting because they have not been able to come up
with a way to buy a home. After all, you need a down-payment,
right? Well, yes and no. There are programs available through many
credit unions which can assist home buyers with financing a home
loan. You need to check it out to be sure what may be available to
you through your credit union.
What's a Credit Rating Your credit report rating (or your "FICO score") is the number that banks and credit institutions use to assess your potential credit risk, based on a formula that measures your credit history and current credit accounts. The three major credit bureaus, Trans Union, Experian and Equifax, each develop a score based solely on the information in their files on you.
Improve Credit Rating Does this mean you should ALWAYS buy rather than rent? No.
Renting is appropriate in many cases. If you can pay $650 in rent,
and can actually afford $950 a month for housing, you can bank $300
a month toward a down payment. A 10% down payment on a $100,000
home is $10,000, right? And if you rent for three years, how much
could you save toward this $10,000? The numbers don't lie. You
could save $10,800 in those three years. What does $300 a month
look like? Well, if you fill up the car 3 less times, and eat out 3
less times, you are at about $200 a month in savings. And I'm
betting that last $100 would be pretty easy to find, too. Even
better would be a 20% down payment. Coming up with a 20% down
payment would allow you to skip PMI, or Private Mortgage Insurance,
an additional expense added into your mortgage payment. Think about
it.
Bad credit loan, bad credit mortgage, bad credit rating, poor credit rating, mortgage bad credit, mortgage bad credit rating
Credit Online Rating Report There are other benefits to buying your own home. It will come
as no surprise to you that homes have gone up in value consistently
in many areas of the country. But you don't realize this benefit if
you don't own a home. In many cases, home owners have gained
hundreds of thousands of dollars in appreciation of the value of
their homes in a relatively short period of time. Think about this.
You purchase a home for $150,000 with a $30,000 (or 20%) down
payment. In three years, your home has escalated in value to
$220,000. Mortgage payments are mostly interest in the first years
of the loan, so you can't expect that you gain much in the early
years of your loan. HOWEVER, because of the appreciation in the
value of your home, you now have an equity position worth not
$30,000, but $100,000 since your mortgage balance is still about
$120,000! Magic, right? Well, it depends on what you do next.
A company credit rating is key for any business looking to expand. Credit ratings can determine whether or not a business is able to continue to grow. Credit ratings can also provide a key indicator for companies when deciding who to do business with. Information on credit ratings for firms all over the world are available on the internet.
Credit Score Rating Scale If you have considerable higher cost debt, like credit card
balances, it may make sense for you to refinance your home and pay
off the higher interest rate debt. And remember, the interest on
your HOME is deductible when you do your taxes. But the interest
you pay on credit cards, which is almost always at a higher rate
than home mortgage interest, IS deductible. So refinancing your
home may well be a smart decision if you use the proceeds to
improve your overall financial position with regard to debt.
What's a Good Credit Report Rating While each lender decides what credit score it considers a good risk, if you're credit score is generally 650 or better, you will probably be considered a good credit risk (meaning, you're likely to pay off a loan on time and in full), and you'll therefore qualify for a prime (i.e., desirable) interest rate. If your credit report rating is between 620 and 650, you may also be qualified for a desirable loan, but you may need to provide the lending institution with additional documentation to prove that you're creditworthy.
Bad Card Credit Credit People No matter what you decide to do, be sure you factor in advice
from your credit union in your decision equation. Your credit union
truly is there to help you. Don't pass up the opportunity to obtain
the information they have to offer when you make financial
decisions.
Free Credit Rating Report John Holder is the founder of
http://usacreditunions.com. We have a dedicated
page of detailed information on every Credit Union in the USA and
make it easy for you to find one for you to join.
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