It’s very imperative that you know your Fico score because the FICO score is how the lenders determine your credit worthiness when you apply for a loan. The higher the FICO, the more likely a lender will lend you money and the more money you will save in interest.
If you have a high FICO, this tells the lenders that you are very good at paying back your payments and that you are a trustworthy person.
Your FICO score could be anywhere from 300 points to 800 points. To qualify for a mortgage, conventional lenders are now asking for a FICO above 700 points.
If you want to buy a home, refinance a home or make a big purchase like buying a car, knowing your fico score before you sit in the negotiation table will give you unfair advantage.
Knowing your FICO score before applying for credit allows you not to take “BS” from sales people who might tell you that your credit is too low.
If you want to buy a home, buy an investment or refinance your home, we strongly recommend you to have your own copy of your credit report before you apply for credit with a mortgage broker.
If you have your own copy of your credit report, you avoid having your credit report being run every time you apply for a new loan when you are shopping around for the best deal.
Every time a lender runs your credit report, a “Hard Inquire” is created in your credit report. Having too many “Hard Inquiries” in your credit report could lower your FICO score.
Now, when you run your credit report and get your FICO score with a company like myFico.com, a “Soft Inquiry” is created in your credit report and your FICO score is not lowered.
One last thing, when you apply for a mortgage loan, you want to know your FICO score in all of the three mayor credit bureaus (Equifax, Transunion and Experian) so when you order your credit report, make sure that you are getting the FICO score of all three credit bureaus. Please visit myFico.com for further details and more information. Their web-site is www.myFico.com
Disadvantages of Reverse Mortgages
Reverse mortgages are not often understood, not even by Real Estate Agents or Mortgage Brokers, so, when you apply for a reverse mortgage, check for the company/agents experience on reverse mortgages.
- The cost of a reverse mortgage is usually higher than any other lending alternative like refinancing or equity lines of credit.
- Reverse mortgages are more complicated than conventional mortgages making it harder to get you approved by a reverse mortgage lender.
- A reverse mortgage, reduces the equity of your home.
- Even though the money you receive from a reverse mortgage is tax-free, it might affect your ability to qualify for public assistance like Medicare, Social Security Income, Medicaid/Medicare ,etc.
So, before you apply for a reverse mortgage, think about the above disadvantages and discuss them with your love ones to find out if applying for a Reverse Mortgage is the right thing to do for you.