The Home Buyer's Korner

Information presented should be used for educational purposes only.

November 28th, 2014

Guy looking up in color

Holiday Spending

my first tatoo gunAs the shopping season begins this week would-be home buyers need to think long term. If you’ve come to realize that you’re paying much more in rent than if you purchased a home or you’ve gotten further down the road and in the planning stages of home ownership, there’s going to be many temptations this season that can derail your dreams.

This time of year you’re going to be offered all kinds of discounts from retailers to open a credit card account and it’s tempting to apply for a new credit card or even multiple accounts. If you get tempted, weight the consequences.

Long after the holidays have come and gone, if you charged a gift you could be paying for it for years to come. Your FICO score could go down and that could increase the interest rate you’ll be offered when you apply for a home loan.  Worst of all, that one purchase could be the tipping point between qualifying for a mortgage or being denied.

In today’s world when it often cheaper to own than rent, you could find yourself paying hundreds of dollars each month for a place that isn’t building you and your family any equity and doesn’t have that extra bathroom you desperately need.  Most of all when construction season begins in early spring and you’re driving to work, you’ll feel all the more let down when you see that home getting build and you can afford it. Don’t over do your gift giving for things that end up underneath the bed or in the closet, never to be used again or in this summer’s yard sale.

Your debt-to-income ratio can suffer when new lines of credit are opened and lenders consider both the used and unused portion of your credit limit. Holiday spending can inflate most would-be home buyer debts, but that’s not the only affect holiday buying can create. If you’re not mindful of the big picture, you can get tempted to skip a payment or two this time of year in order to free up cash for the holidays. This can definitely hurt a your ability to purchase a home, as the most recent 12-months of your repayment history can be the most critical aspect a lender looks at when considering your application for a mortgage.

Preparing for home ownership isn’t always the easiest thing to do, especially this time of year and where many get off track.  Remember you want to keep your FICO score as high as you can and watch to make sure your monthly repayments don’t affect your ability to buy the home.

Don’t make the mistake of tapping into your savings for your down payment to buy that high ticket item, with the promise you’ll pay it back with your tax refund.  If you enjoy family and friend this season and don’t focus on temporary satisfactions the holiday season often brings, it’s definitely worth the extra effort. Keep a close eye on both your credit and your payments this holiday season and when it’s time to apply for a home loan you’ll see the real long term benefits of home ownership for you and your family.

Gifts that Last a Lifetime

Minneapolis, Minnesota


Median Home Price: $188,000 

Principal & Interest Payment @ 3.99 Percent: $896.46

Average Rent: $1478.00

Salt Lake City, Utah

Salt Lake City

Median Home Price: $233,000 

Principal & Interest Payment @ 3.99 Percent: $1111.03

Average Rent: $1387.00

New Orleans, Louisiana

New Orleans

Median Home Price: $158,000

Principal & Interest Payment @ 3.99 Percent: $753.41

Average Rent: $1383.00

Seattle, Washington 


Median Home Price: $340,000 

Principal & Interest Payment @ 3.99 Percent: $1621.25

Average Rent: $1778.00

Job Growth: 2.6 percent

Denver, Colorado

Denver 1

Median Home Price: $288,000 

Principal & Interest Payment @ 3.99 Percent: $1373.30

Average Rent: $1680.00 

Dallas, Texas


Median Home Price: $175,000

Principal & Interest Payment @ 3.99 Percent: $843.47

Average Rent: $1575.00

Grand Rapids, Michigan

 Grand Rapids

Median Home Price: $123,000 

Principal & Interest Payment @ 3.99 Percent: $586.51

Average Rent: $1183.00

Austin, Texas


Median Home Price: $226,000

Principal & Interest Payment @ 3.99 Percent: $1077.66

Average Rent: $1631.00

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Organizing your home shopping experience affords a wise decision making process.

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