Do’s and Don’ts of Holiday Shopping

Do’s and Don’ts of Holiday Shopping.

Shopping this holiday season

Shopping this holiday season

This is always a challenging time for families thinking of purchasing a home. Credit cards create a “buy now, worry later” hazard for shoppers. Thanks to Retailers advertisements featuring heavily discounted items, we tend to overextend ourselves with our credit card debt. However, shoppers need not risk financial peril if they shop smartly and heed some dos and don’ts of holiday shopping.

Do set a budget. Establish what you can afford to spend on gifts and other seasonal trimmings early on. The National Retail Federation estimates that the average consumer will spend around $700 this season. If you cannot afford to pay your entire credit card off to avoid steep interest charges then you should rethink your budget and set one up that you can afford. Remember, any credit cards you still owe money on will reduce your purchasing power in shopping for a home. Lenders use a debt to income ratio to qualify homes buyers for loans.

Don’t be fooled by false sales. Retailers  understand that a good advertised deal lures shoppers into their stores. As a result, some retailers mark up the cost of certain items in order to slash the prices for holiday sales. Even if you are saving the assumed 50-60 percent, the final cost of the item still may be higher than normal. This is true with home shopping. Just because a seller has discounted their property $20k – $30k doesn’t mean that they have discounted the true value of the house. Always have a R.E. Agent do an Comparative Market Analysis (CMA) on any home you are interested in.

Do schedule time for shopping. Hectic schedules results in last minute shopping. Set aside time to actually shop different stores to find the best deal. You want to think through your decision and not regret your hasty purchase. Same with looking for a home. Do your homework. The National Association of Realtors estimates that buyers start looking for homes 12 months before they are ready to buy.

Don’t double buy. Some shoppers use the holidays sales to purchase items for themselves. While it is tempting to treat yourself come the holiday season, this is a quick way to blow your budget right out of the water.  If you are in escrow and waiting to close before the end of the year don’t start buying large priced items for your new home. This could raise your debt to income ratio and cause you to have to finance your purchases into your home loan.

Don’t be afraid to delay some purchase if need be. If you or your company is hosting an after holiday party, delay purchasing those gifts until after December 25th to find even deeper discounts on the items you want to buy. All lenders check your credit just before they fund the loan to make sure there are no changes to your credit. You will need to explain any large purchases whether or not you used credit or cash.

Do keep a level head. Some people forget the season is for spending time with loved ones. Getting swept away by shopping and worrying about deadlines can make the season less enjoyable. Don’t allow the stress of holiday shopping to compromise an otherwise joyous time of your. With that I wish you and your family a wonderful holiday season.

 

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