If you're buying a home in the New Year, keep a close eye on holiday spending. After all, you don't want to hinder your chances of obtaining a loan and you'll also need to make sure you have plenty of cash in hand in your first year of home ownership.
Why should you worry about holiday spending? The main reason is because your credit history is important when obtaining a home loan.
When you apply for a home loan most lenders will check your credit history. If you have large outstanding amounts on credit cards or if you have made late payments or defaulted on other loans in the past, the lender will see this and your chances of getting a home loan may be adversely affected.
You may also need extra cash when buying a home. You may have a deposit for the property you want, but have you considered the need for additional money for conveyancing and loan costs, moving costs, maintenance, insurance or new furniture?
Here's how to stay financially focused these holidays...
- Budget - write a list of who you need to buy for, work out what you're going to buy and how much to spend before you hit the shops.
- Keep credit card spending to a minimum.
- Look for ways to earn extra money - can you do some overtime at work, adjust the household budget or perhaps get a second job to help fund your holiday.
- Don't shop at the last minute - the stress of `having' to buy something can cause you to spend much more than you normally would.
- Bargain hunt - keep your eyes open for sales and specials or, if you know what you're looking for, scour ads in the local newspaper or online.
- Pay off debts in full - as soon as your credit card accounts arrive, pay them off in full and on time.
