Let’s do the math first.
Hi everyone ✌️
Even though the holiday decorations have been on sale since June, November is the time when the gift buying gets serious. Before the skin forms on your Thanksgiving gravy, you’ll be getting ads (ad nauseum) for Black Friday, Cyber Monday, Small Business Saturday, and so many more. It’s important to keep your credit cool, though. If you are planning on buying a home next year, be careful about how you spend this year. There are lots of little (and a few big) things to avoid to keep your credit clean and your loan process smooth.
And if loan options are on your mind, you may have heard talk about a 50-year loan. Check out my Instagram post about it. It’s another idea that sounds kinda good at first but will cost you THOUSANDS in the end.
Here are a few more tips to buying smart (tip number one is a new one).
TIP 1: AVOID THE “BUY NOW, PAY LATER” OFFERS.
Offers from Afterpay, Klarna, or Affirm may seem easy but they can complicate—and slow down—your mortgage approval. Why? They don’t appear on your credit report but they do count toward your debt-to-income (DTI) ratio. Even if you use it on relatively 🛍️ small purchases, those can really add up. Before you know it, your DTI will have your mortgage lender saying WTF?!
If you have to use one, I strongly advise that you pay it off two months before applying for a mortgage.
TIP 2: DON’T OPEN ANY STORE 💳 CREDIT CARDS.
You really don’t want to open any new lines of credit (cards, car loans, etc) but store credit cards can be the most tempting. That money you save buying your nephew new AirPods so you can be the cool uncle is not worth the potential impact to your credit and long-term interest rate. True story: A borrower who saved a small amount on jeans by opening a store credit card incurred over $3,000 in loan costs due to the inquiry’s impact.
TIP 3: AND NO BIG PURCHASES!
Even if it’s an awesome deal on an awesome 🚗 Porsche. Wait until after you buy your home. Then you can get that dream car—if it is sensible with your long-term financial health. Bonus: I’m happy to talk with you about real estate, financial planning, and wealth building.
So give me a call or DM. I’m ready to help make you thankful at Thanksgiving and happy at the holidays. And in a new home in the new year.
Happy closing
—Mark