Your FICO score is not a regular credit score. It is the brand of score most widely used in mortgage qualification. The FICO score was developed by Fair Isaac and a company known for developing risk assessment models.
It is a complex equation that is not fully disclosed. The information used to calculate your FICO score is found on your credit report and much of it is interdependent in the calculation. This makes it an extremely complex formula.
There are five main areas of the FICO score calculation:
The first and largest portion is your payment history, and it accounts for 35% of your FICO score. This looks at how well you do at paying you bills on time. It takes into account any late payments you might have and looks at the severity, how recent, and how often it happens. The formula reviews a total of seven years of your payment history.
The next 30% is your utilization. This is calculated by dividing your outstanding balances by your account limits. This is done across all your accounts and on an account by account basis.
How Credit History Affects Your Fico Score
15% of your FICO score calculation is your credit history. It is better defined as – how long have you had credit? There are two sub-factors that are considered: The age of your oldest account and the average age of all your accounts.
Inquiries make up the next 15%. These are better defined as how many times your credit report has been reviewed. There are two different types – soft and hard.
Soft is when anyone like yourself, an employer or insurance company, checks your report. Hard is when a creditor checks your report after you have applied for a new account.
The last 10% is your credit mix. This takes into account the credit that you use. There are few rules discussed, but using several different types of credit is in your favor. Many of these factors are interdependent which makes understanding and attempting to estimate your FICO score nearly impossible.
What is really important is that you know what goes into it and how you can impact your FICO score on a day to day basis. You can learn more about what goes into a credit score, and the complexity of the system, by reading this article at BestCredit.com.
Housing policies caused the financial crisis, according to Peter Wallison, a scholar at The American Enterprise Institute. Wallison lays all the blame on Fannie Mae and Freddie Mac, along with government intervention.
Questions or comments, use the comment link below. We'd love to hear from you.
While Long Island NY home additions such as an outdoor deck or a garage can instantly add resale value to your home, other types of Long Island NY home additions are made simply to satisfy the current homeowner.
Long Island NY home additions that require construction may also require a permit. Permits are the way a state regulates construction practices within its jurisdiction.
The home upgrades and additions that may not require a permit are:
- Fences six or fewer feet high
- Platforms
- Decks 30 or fewer inches high
- Plumbing work
- Electrical work
- Upgrading or replacing fixtures
While the home upgrades listed above are fairly common, they're not the most popular.
Here are three of the most popular Long Island NY home additions.
Jacuzzi
A Jacuzzi is one of the most popular Long Island NY home additions partly because of the high-powered water's ability to rejuvenate, refresh, and relax the user. Jacuzzis assist (and in some cases speed up) the healing process of muscle aches, back pain, and other injuries. Other Jacuzzi use benefits include improving your flexibility, increasing muscle endurance, and soothing the stress of high blood pressure patients.
The water jets in a Jacuzzi also help alleviate fatigue by aiding the release of endorphins into the body while allowing harmful toxins to leave the body.
Jacuzzis vary in price from just under $1000 for basic units to over $14,000 for a top-of-the-line model.
Adding a Jacuzzi to your home can provide multiple health benefits for years to come!
Swimming Pool
You don't need an Olympic-size swimming pool to make a splash in the world of home water sports. Swimming pools come in a wide range of styles from in-ground to indoor.
Starter swimming pools, such as the above-ground Intex Ultra Frame 16-foot set, can be obtained for around $650. Yet, more elaborate in-ground pools can cost tens of thousands of dollars.
Home Sauna
The heat produced in a sauna provides your skin with several benefits. As the temperature in a sauna rises, the heat causes your blood vessels to dilate. The increased blood flow helps your muscles relax.
As your heartbeat speeds up, you get a mild cardiovascular workout while sitting in the sauna. Also, the profuse sweating (caused by the heat) helps toxins exit from your body.
Introductory-level home saunas can be purchased for a little over $1000, a small investment for increased health benefits.
Long Island NY home additions can both personalize and add personality to your property. What popular home additions would you add to our list above? Leave a comment below.
If you'd like a lower rate on your mortgage, HARP might be able to help.
Get more mortgage tips and information by choosing the "Mortgage Info" category to your right. If you have questions about a mortgage or qualifying for a mortgage, use the comment link to contact us.
There are 2 important Long Island NY real estate tax deductions you won't be able to claim in 2012.
Congress was so busy bickering at the end of 2011 that it allowed two important tax breaks for home owners to expire.
Long Island NY Real Estate Deductions We Lose in 2012
1. You can no longer deduct the cost of private mortgage insurance premiums.
2. You aren't getting a tax credit for some of your home energy improvements.
You can take advantage of these provisions when you file your 2011 tax return — but beyond that, who knows?
Private Mortgage Insurance
Up until the end of last year, you could deduct your private mortgage insurance premium (PMI) when calculating your income taxes. It was a benefit targeted to lower- and middle-income home owners. Once you made $100,000 or more, it started disappearing and anyone who had more than $110,000 of adjusted gross income couldn't use it.
The home owners who have to get mortgage insurance are Long Island NY real estate buyers with less than a 20% down payment and refinancers with less than 20% equity. That's more often first-time home buyers or younger home owners and less often move-up buyers who've built up equity in their homes. So in taking away the PMI deduction, Congress is raising taxes paid by first-time home buyers and younger home owners leaving them with less money to spend on housing. That's especially headed in the wrong direction when the housing market is struggling to recover.
Energy Tax Credit
The tax credit for energy efficiency upgrades on Long Island NY real estate wasn't enormous — it was capped at $500 or 10% of the cost for some projects; less for others. But it was a nice incentive to add insulation, new windows, or to upgrade your HVAC system with a more efficient unit.
Home ownership and energy independence advocates will fight to get those expired tax rules back on the books in 2012 and to have them apply retroactively. It's a familiar fight — they had to do the same thing at the end of 2010. The battle this year is more complicated however, since we're in an election year.
Most of us consider the renewal of those policies is a no-brainer. And we really don't appreciate it when Congress lets those rules expire at the end of one year and then leaves us to wonder the rest of the next year whether they'll be renewed.
Will you be claiming either of these Long Island NY real estate tax breaks on your 2011 returns?
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