Financing Furniture After Buying a House: What You Need to Know

Introduction

After the excitement of purchasing your dream home, it's time to think about furnishing it to make it truly yours. However, financing furniture after buying a house can be a challenge. You want to avoid any financial pitfalls that could jeopardize your mortgage approval or put unnecessary strain on your budget. In this blog post, we'll explore the best strategies for financing furniture after buying a house, taking into account expert advice and tips from industry professionals.

Wait on Certain Purchases

When it comes to financing furniture after buying a house, it's important to be patient and wait on certain purchases. According to experts, there are five items you should avoid buying during the mortgage loan process:

1. New furniture
2. Cars, boats, etc.
3. Large appliances
4. Clothes
5. Anything on credit

These items could potentially cause a temporary drop in your credit score, which could jeopardize your mortgage approval. It's best to wait until after your mortgage loan closes to make these purchases.

Stick to Cash

One of the best ways to finance furniture after buying a house is to stick to cash. By using cash, you can avoid taking on additional debt and interest payments. It's important to prioritize your furniture purchases and save up cash beforehand. This will give you the freedom to buy what you need without worrying about monthly payments or interest charges.

Consider Alternative Financing Options

If you don't have enough cash on hand to finance your furniture purchases, there are alternative financing options available. Some lenders may allow you to borrow extra on your mortgage to pay for furniture. However, it's important to carefully consider the pros and cons of borrowing extra on your mortgage for furniture.

Pros of Borrowing Extra on Your Mortgage for Furniture:

• Lower interest rates compared to other financing options
• Potential tax benefits, as mortgage interest may be tax-deductible
• Consolidation of debt, if you have other high-interest debts

Cons of Borrowing Extra on Your Mortgage for Furniture:

• Longer repayment period, which could result in paying more interest over time
• Increased monthly mortgage payments
• Potential impact on your credit score

It's important to weigh these pros and cons and consider your individual financial situation before deciding to borrow extra on your mortgage for furniture.

Explore Other Financing Options

If borrowing extra on your mortgage is not the right option for you, there are other financing options to consider:

• Personal loan: You can apply for a personal loan specifically for furniture purchases. Personal loans often have higher interest rates compared to mortgage loans, but they offer a shorter repayment period.
• No-interest in-store loan: Some furniture stores offer no-interest loans for furniture purchases. These loans typically have a promotional period during which no interest is charged. However, if you don't pay off the loan within the promotional period, you may be charged retroactive interest.
• Home equity loans or HELOC: If you have sufficient equity in your home, you can consider taking out a home equity loan or opening a home equity line of credit (HELOC) to finance your furniture purchases. These loans use your home as collateral and often have lower interest rates compared to personal loans.
• Credit cards: While using a credit card to finance furniture purchases is an option, it's important to be cautious of high interest rates. If you choose to use a credit card, make sure to pay off the balance as soon as possible to avoid accruing excessive interest charges.

Conclusion

Financing furniture after buying a house requires careful consideration and planning. It's important to wait on certain purchases until after your mortgage loan closes to avoid any negative impact on your credit score. If you have enough cash on hand, sticking to cash is the best option. However, if you need to finance your furniture purchases, consider alternative options such as borrowing extra on your mortgage, personal loans, or no-interest in-store loans. Explore these options and weigh the pros and cons before making a decision.