Wednesday, December 9, 2015

Don't Let Holiday Shopping Ruin Your Chances of Buying a Home on Chicago's North Shore

The holiday season often means hectic schedules for many North Shore residents— from visiting with friends and family to the festive events I shared in my previous blog post to hours of holiday shopping. But did you know that the latter can really take a toll on your pre-approval for a mortgage if you're not careful?

Before you get carried away with gift-buying this year, it's important to keep the following in mind as a potential North Shore homebuyer:

Pay all of your bills on time
Holiday shopping can come with large bills and putting them off until your schedule calms down may seem like a great option, but in reality, it can compromise your chances of being approved for a loan. A payment over 30 days late can lower your credit score anywhere from 60 to 110 points, which can be a major loss even if you have a high score to begin with.

Even if you've already been pre-approved for a mortgage on the North Shore, that is not a free pass to fall behind on your bills. In fact, it's now more important than ever to pay bills on time and in full! You will not want to give a lender any reason to deny your loan altogether.

Don't take on new debt or credit cards
With online shopping, it's easy to reach for your credit card and keep those holiday purchases "out of sight, out of mind." However, acquiring more debt can impact your "Debt to Income Ratio" or DTI and raise a red flag to a lender that you may be more high risk than they previously thought.

The same goes for opening new credit cards. Opening a new card triggers a "hard inquiry" on your credit score and can impact your score in the process. As many lenders monitor debt during this time, new debt may cause them to rethink your qualifications.

Be careful moving around money
Transferring money from one account to another to fund holiday purchases may seem trivial, but it can create a hassle for lenders. They will need to monitor large sums of money going in and out and if they cannot track the funds, it may raise another red flag. North Shore buyers should be able to explain unusual deposits or withdrawals to keep their approval status on the right track.

Buying a home in Glencoe, Winnetka, Deerfield, Northbrook, Highland Park or the surrounding areas is a big step and as your trusted real estate expert, I'm happy to provide you with the steps to keep the process moving ahead, as seamlessly as possible.

Give me a call today!

Janie Bress
Your North Shore Real Estate Expert

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