You don’t have to look far to see that the countdown to Black Friday has already begun and many have already finished their holiday shopping. It seems to happen earlier and earlier every year! But if this is the year you’re shopping for a home, you’ll need to curb your spending.
From the holiday commercials online and on the TV to displays in every store you enter, it’s hard not to get swept up in the excitement of gift giving over the holidays. But those in the market for buying a new home this year or early next year, should hold off on the holiday spending spree. It could negatively impact your ability to buy a home.
Things you should know
• Once you have been pre-approved for a loan, any large credit purchases or changes in your debt can impact your ability to finalize that loan. We caution you not to rack up your debt with gift purchases. Debt to income ratio is important.
• The bank will check and recheck your credit score and level of debt from the time you apply for pre-approval until the time the ink is drying at closing.
• Your credit score will be affected by increased debt. Credit utilization ratio accounts for nearly 30 percent of your overall credit score. This ratio is the amount of credit you’ve used vs. the amount of credit you have available. The lower your ratio, the higher your score will be. This determine your interest rate on a mortgage and be a factor in if you qualify for a loan at all.
Juggling gift buying with house buying
This is the year you’ll need to rethink your level of gift giving. Try and keep this year’s shopping simple and follow these tips:
• Set a budget for holiday shopping and stick to it.
• If you need to use a credit card, make sure it is really necessary-no impulse spending.
• Try paying cash for everything.
• Explain to those close to you that you buying a home and need to conserve your funds. Those who matter will understand.
• If your extended family is large, try swapping names so you exchange gifts with just one other person. Your relatives will thank you!
• Shop online deals and sales that you can pick up in-store to save on shipping.
This holiday season why not focus on what really matters most – family, friends, and purchasing your new home. Sloane Realty is available to help with your home buying needs. Give us a call at 866-931-5201 if you’d like to meet.
All of us at Sloane Realty wish you and yours a wonderful holiday!