Are you a savvy shopper who looks forward to snagging deals on Black Friday and Cyber Monday? If so, you might be surprised to learn that these shopping days can also provide valuable lessons in managing your finances—especially if you’re considering buying a new home. In fact, adopting a credit-smart approach during this bustling shopping season could save you more money on your future mortgage than any retail discount, doorbuster or early-bird special ever could!
Check out our credit-smart tips for Black Friday and Cyber Monday shopping below. And remember, even if you’ve been preapproved for a mortgage, nothing is set in stone. Your financial behavior leading up to the closing date can impact your approval status, including the loan amount and interest rate. Keeping this in mind can help you make informed decisions during the holiday shopping rush.
Don’t: Put a Dent in Your Savings
No matter how attractive a deal seems, consider postponing major purchases until after you’ve closed on your new home—especially if the cost will add to your overall debt or deplete your savings.
Why? Keeping money in your savings account as a cash reserve can help you look like less of a risk to lenders. It can also help you maintain your history of paying bills on time, which is a major factor in your credit score. Using credit cards instead of cash has its own hazards; increasing your debt-to-income ratio can nudge the needle downward on your score—exactly what you don’t need when purchasing a new home!
Do: Go on the Hunt for Small Appliances
While large purchases are a no-no during your mortgage loan process, smaller, more affordable finds are fair game! Black Friday and Cyber Monday are perfect for picking up essential kitchen gadgets like a blender or a toaster—items that will undoubtedly come in handy in your new home.
However, it’s wise to keep your spending in check. A few well-chosen small appliances can enhance your cooking experience and add to your new kitchen’s aesthetic without straining your budget. Just remember, it’s all about forethought (try to resist those impulse buys!), balance and ensuring that your purchases align with your financial goals.
Don’t: Get Pulled into Big Furniture Deals
Big furniture discounts often catch the eye of eager shoppers, but be wary. Not only are these purchases a big hit to your bank account or credit card, but they may end up being a poor choice for your future space, especially if you haven’t found your dream home yet.
Sofas, in particular, are notorious for looking much smaller in the showroom than in your living room. To avoid buyer’s remorse—and a potential interest rate hike—we recommend saving your money and splurging on furniture after you have the keys and can take the appropriate measurements.
Do: Go on Model Home Tours
You won’t have to get up at the crack of dawn to shop for a brand-new home, but Black Friday is still a great time to avoid the crowds and scope out communities and floor plans in the areas where you may want to live. Many of our notable neighborhoods across the country have model and quick move-in homes that you can tour. Check our website to see the hours we’re open, and whether you’ll need to make an appointment.
Don’t: Open a New Credit Card
As any mortgage consultant can tell you, opening new accounts before or during your mortgage application process is not a good idea. Adding accounts can lower your average account age and lower your credit score. Not something you want during the loan process!
Do: Take Some Time to Relax with Friends and Family
While it’s easy to get caught up in the excitement of Black Friday and Cyber Monday shopping, remember that Thanksgiving weekend is ultimately about being thankful for what you have and the people in your life. Take a step back from the commercial frenzy to spend quality time with loved ones. Engaging in meaningful conversations and enjoying each other’s company can create cherished memories that outshine any sale.
If you do decide to venture out to shop, make it a festive outing instead of a stressful one. Share laughs, grab a meal and celebrate the season together. These moments are invaluable and serve as a reminder of what truly matters.
Final Thoughts: Balancing Shopping and Homebuying
As you navigate the busy shopping landscape during Black Friday and Cyber Monday, keep your goals top of mind. By employing a credit-smart mindset, you can enjoy the thrill of seasonal deals while also safeguarding your financial future. The decisions you make now can profoundly influence your homebuying journey.
Stay focused on maintaining (or building) your savings, avoiding large purchases and resisting the temptation of opening new credit accounts. Embrace the chance to explore potential neighborhoods and floor plans while avoiding the crowded shopping malls. Finally, prioritize the importance of connection with loved ones during this festive season.
By following these guidelines, you’ll not only be prepared for a successful shopping experience, but also position yourself for a smooth transition into homeownership. Enjoy the excitement of the season and remember that careful decisions now can lead to owning your dream home in the future.
For questions about home loans, please contact our affiliate, HomeAmerican Mortgage Corporation (see licensing information below) at 866.400.7126.
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