Newb ? about buying expensive stuff before Settlement (furniture, buying a home, bank)
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Even though it has been explained to you I feel the need to share this story. It was used as an example in real estate school as to why it's so important to not buy anything big before you close on your home:
Wealthy husband and wife purchase a beautiful $600,000 ish home. Apply for a mortgage and are approved, etc. etc. About 3 weeks before closing the wife decides to go purchase furniture for their new home. She winds up buying $10,000 worth of furniture and charges it. About a week before closing the underwriter reverifys her credit score, checking accounts, etc. and sees that due to the $10,000 purchase the couple no longer has the credit score required to qualify for the loan they had been approved for. Now, the couple has to return all the furniture they purchased, delay closing for 30 days for the return to process and show on their credit, then close.
I know its exciting to buy a house and you have so many things you want to buy but really, it is best to wait until you move in. Aside from the important advice about debt ratios, you really need time to learn the house before buying anything big. I had my plan figured out on what furniture I wanted for our family room. I waited till we closed and we were in the house a month when I realized the furniture I was going to buy really wouldn't work well in the room. SOOO GLAD I waited and thought about it more.
My sister used to be a realtor and she had a client that went nuts and bought a ton of furniture for her new house right before close. Just like everyone else said, the underwriters pulled her credit one last time. Debt ratio was off and she didn't get the house. Don't put the cart before the horse.
Besides spending money, be aware about receiving money, too. Because the bank will ask you prove how and where you get a big deposit in your account suddenly.
Well you can't get a sofa in there before you move in because you don't own the house. You can't put anything into the house until it is officially yours.
BTW, still on hold. My mortgage loan apparently had to go through an auditing process which meant my settlement, which was suppose to be Thursday was pushed back a week. I was looking at furniture the last 2 weekends, and a special order on a sofa would mean an 8-12 week delivery.
I've pretty much figured out what I want though, just a matter of purchasing it.
You could just pay cash for the items you want to buy. That way you don't have to worry about it affecting your closing.
Uhh...generally the lender will check to make sure you have cash available to bring to the closing table. If they see a large withdrawl from your account it could cause a red flag to go up.
You could just pay cash for the items you want to buy. That way you don't have to worry about it affecting your closing.
Quote:
Originally Posted by BiggJoe4181
Uhh...generally the lender will check to make sure you have cash available to bring to the closing table. If they see a large withdrawl from your account it could cause a red flag to go up.
Play it safe. Wait until you have the keys.
I think MaseMan meant cash in your hand (in your pocket), not in your account at the bank or at any fund ...
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Don't put the cart before the horse. 
punching above their weight
