One Plus One Make Homeownership Mortgage SolutionsBy Debbie Wilson
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The steep rise in home prices during the past decade has made it almost impossible for first-time buyers to obtain a new home loan. But while it may seem tough, obtaining that mortgage and dream home is far from impossible. You just might have to consider the possibility of joining forces with a partner or friend and enlist the power of two. Before you get started, check out their FICO score!
What is a FICO ScoreFICO stands for Fair Isaac Corp., a firm that calculates financial scores for lenders. The scores represent a snapshot of how good or bad a credit risk you are. You actually have three separate FICO scores from three different credit bureaus -- Equifax, Experian, and TransUnion. As a lender, your FICO score helps them determine what type of mortgage you can qualify for. Typically, if your score is 700 or higher, you'll get a low-interest rate mortgage; with a score below 700, you'll probably be stuck paying a significantly higher interest rate. Most lenders will use your middle score, or an average of all three to produce the actual interest rate they'll be willing to offer you.
How to Obtain Your FICO ScoresFICO scores can be purchased for approximately $15/score through online sources. Checking out your partner-to-be's FICO can be a great way to decide if he or she has the financial backing and history to successfully embark upon a new home loan with you. If each of you have FICO scores above 700, the housing business should probably be a go. If the scores are lower, consider renting for a year first.
Ultimately, once you decide to purchase the new home loan, you'll become more than just friends, but business partners as well. Make sure you protect both your interests by signing legal documents that clearly spell out the terms of your mortgage arrangement and ownership deal. By working out the potential problems before you buy (like FICO scores), and those that will occur during the ownership phase (like remodeling, banking, exit strategies), you can help to make a home sweet home you both can enjoy.
About the Author
Debbie Wilson owns and operates a lakeside resort. Her previous experience includes profitability consulting for a national healthcare company. Debbie holds a B.A. in Business Management with a minor in Physical Education.
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