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Managing Your Finances When Closing on a House

Closing on a home is thrilling!  It’s the mark of a new start in your life, the chance to move forward and create a space for yourself. But, unfortunately, in the excitement of this, many of us find ourselves spending more money than we should.

If you’re closing on a house, and you’re trying to be smart about your finances:  here’s what you should do.

Avoid Buying or Leasing A New Car

You may get the urge to buy or lease a new car to match your new home: but don’t do this.  This can be a huge red flag to your lenders, even if you’re only upgrading through a trade-in.  Instead, wait at least three months after you buy to make any large financial moves like this.

Don’t Switch Jobs

A major reason lenders give their money to those they do is because they have a good working history.  By switching your job at this pivotal time, you could make yourself seem flakey.  On top of this, you’re also setting yourself up for undue stress.  Starting a new job while you’re in the middle of moving and changing your life around can stretch you too thin and leave you exhausted and agitated.

Avoid Relying On Your Credit Card

While the homeowner’s focusing on the seller closing cost calculator: you should be focusing on your own budget as well.  Ensure that you don’t overspend on moving costs, closing costs, or anything else through your credit card.  At the moment, it may feel like it’s saving you some stress and giving you time: it’s also going to put you at major risk of debt and possibly affect your credit score.

Don’t Open A New Card or Account

Avoid opening a new credit card at this time.  Opening one at this moment will drop your credit score by a couple of points and could generate a red flag saying that you’re unreliable in your spending habits.  Trying not to spend more money than you have, and avoid opening new cards or accounts.

Make Your Payments On Time

Try to make all payments on time.  One late payment can ruin a great credit history and could be hazardous when you’re currently trying to close on a home.  Set a special budget for these couple of months so that you can set money aside for fun and new-home items while also ensuring that your main bills are covered.

Avoid Spending On Furniture

Some people get excited while they’re closing on a home and start buying furniture like wild.  Although it’s nice to be excited and have dreams for how your home will look, you should avoid allowing yourself to overspend like this.  Instead, window shop for furniture and bookmark sites that you like so that you can revisit them when their items go on sale or you have more money available.

Closing on a home is a lot of money and time; you should avoid allowing yourself to make poor financial decisions.  Instead, put in the time and effort to keep within your budget and come out clear on the other side.

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