Underwriting and (not) spending mOney question

infantsorrow

We'll start underwriting tomorrow.  Will any money I spend today count against me?  I forgot about DH's b-day today :P and I need more contacts immediately.

LoveKiss

It's fine to spend cash within reason. What you do not want to do is open any new lines of credit or run up your existing credit lines. For example, if you have a cc with a $5k limit, don't go charge $4500 worth of new furniture. Doing so will negatively affect your available credit amount, which could hurt your score. Remember, your credit score may be pulled again now that you are officially applying for the loan and again 7-10 days before you close. They will be watching you.

Also, don't raid your cash reserves too much. Lenders like to see that you have ample $$ left over after your dp and closing costs are paid. They want to know that if something awful happened 3 days after closing, you would still have plenty of $$ in the bank to pay your monthly mortgage bill for a while. So a $100 birthday gift is probably no big deal, but a $5k birthday gift may negatively impact your cash reserves enough that the lender will raise an eyebrow. Again, you will probably be asked to submit your most recent bank statements a week before closing, so they will see exactly how much cash you have on hand at that time.

And you didn't ask this, but I will share anyway... just in case. Any deposits that you make that are not your direct deposit pay check will need to be explained. So if you have a bank account that is not listed as an available asset on your mortgage application, use it to hold all of your deposits from now until closing. It will save you a lot of headaches. Otherwise you will have to write a letter explaining that $50 deposit that was a birthday gift from Aunt Betty, and provide them with a copy of the check, too. It's a pain in the butt that will have you scrambling and stressing a week before closing. It's just not worth it. So put that check in an undisclosed account or tell Aunt Betty that you will deposit her check after you close on your house.

vpine

Only thing they're concerned about is that you don't open any new credit card accounts. They can check your bank statements up to the last moment if they choose to is what lending officer told me. Buying a b-day gift, groceries and small amounts is okay. As long as your account has the needed down payment and closing costs, they won't question you.

I guess it depends on how picky they want to be (PP)...I was only asked to document Large deposits (Over $1K) that were not payroll-related. They didn't question any deposits less than that.

ROFL ATTACK

Actually they won't accept a letter written,   It needs be a form they send you for the gift granter to sign, and then you sign, then you fax it on to the lender....do the hokey pokey and turn yourself around....

I'd stick to cash at this point.  Like everyone is suggesting.   

GeorgiaRiah

A letter worked for me.  I think it depends on the underwriter.