Tis the Season for holiday shopping. The aggressive sales push this year started BEFORE Thanksgiving with more mega-stores even remaining open on a day when employees should have had the day off (or at least had working on Thanksgiving as being “optional”).Cyber Monday is now cyber week…anyhow, my point is, stores are competing for your dollars. If you are considering buying a home or are currently pre-approved to buy a home, I thought I’d share some tips for you on how to make sure your “pre-approved” status is not jeopardized during the holiday season.
Create a budget and stick to it. You don’t want to dip into hard earned savings needed to fund the closing on your new home.
Create a gift list. This helps me with staying on track with my budget. I often lose track of who I’ve bought for when I’m in a holiday shopping mode. I love using Evernote for this! I start my list early, using Evernote, to keep track of ideas for presents for those I’m shopping for.
Have a gift exchange. Our family started doing a gift exchange a few years ago which has also really helped with saving money during the holidays. With our gift exchange, my siblings draw names for our nieces, nephews and great-nieces and nephews in the family who are under 21 years old. We also do an optional white elephant gift exchange for those which has been a lot of fun.
Use your credit cards sparingly. Keep in mind that using credit will impact your credit scores. Credit scores are dinged when you use more than 30% of your credit limit and dinged again when 50% or more of your credit limit is used. If you go over your credit limit, your scores will be hit again. Although credit scores are reflective of how you use credit, it may take a couple months for scores to recover once you pay down accounts. Mortgage interest rates and mortgage programs are impacted by your credit score.
Avoid applying for new credit. New credit cards will bring down your credit scores as will inquiries for new credit. This is true for “same as cash” promos and even if you don’t use the new credit card.
Getting money from family for presents? Lucky you! If you are planning on using it for funds for closing, we’ll need to document those funds. Be prepared to document any large deposits that appear on your asset accounts. Family may need to sign a “gift letter” and copies of the checks before they are deposited will be helpful for your approval process.
If you are considering buying a home located anywhere in Washington state, I’m happy to help you with your mortgage needs!