Don’t spend the money that you’re planning to use for a down payment and closing costs, it seems really obvious, and yet it happens with more frequency than you would expect. 

Typically, the way this goes down is someone has something that they have to buy, or feel is important or urgent. The rationalization is that, “oh, I’m gonna get paid back by my buddy” It might be “I can do a cash advance on my credit card”, or any of these other ways that money can come to you. The thing though, is that it is not what your pre-approval is based on.  Your pre-approval is based on the money that is in your account right now in the places that we see it.  If you receive outside funds, we may or may not be able to use them for your down payment. The examples I just gave of money from a buddy or a cash advance, are not acceptable funds for the down payment and closing costs. So we would not be able to use them in the transaction. 

So if there is some purchase, or something coming up that you feel is really important, please check with me or with your loan officer to ensure that it’s okay to use that money and that can be used for the down payment. Also, in some cases, we’re really watching the money that you have in reserve after the downpayment, especially for jumbo loans. So if you’re going to make a big purchase, reach out first.