New Large Amount in Savings vs. Payment Shock

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    Weird question – due to a large cash influx, we’ll end up with a big chunk of money sitting in an account until we are able to close on the new home. Because of the way Payment Shock works, is the expectation that we not spend any of that money either? For example, if we want to buy things for our new home in advance. Would this still only fall into the one-time exceptions rule like any other spending? And would we be expected to just sit on that money indefinitely until closing?


    My MC advised me against spending until after I was credit access approved. That new sum of yours can go toward buy down but means nothing for payment shock 🙁


    So after credit access but before we settle on the new house, we would be able to spend? That’s the real question. I know it doesn’t help with Payment Shock, but I am hoping spending it wouldn’t hurt us if we need to do things to prepare for the new house.


    I was told to continue banking my payment shock and savings toward my buydown. I was advised not to withdraw any money from my savings account. I know if there is a one-time emergency that can be explained will be acceptable. My P&S contract was signed in August and my home will not be ready until the first of the year (new construction) and I have not touched a dime. My recommendation is to wait and buy only what you can with the cash on hand. Like you said, the money is sitting there until you close. Good luck and God Bless.


    The exact words my MC gave me was he would have to ask the underwriters if it’s ok to buy a sofa now instead of waiting for it to be delivered a month after closing.

    I ended up waiting.


    Hello BakerTheBaker,

    A sudden windfall, whether it is an inheritance, the lottery or even just your tax refund, tends to burn a hole in your pocket and it’s hard to not engage in a little “retail therapy”.

    It’s far better to let the money sit there in the bank until you close on the new home. It falls into a similar category as not opening any new accounts while trying to get a mortgage. The less confusion you can create for your counselor and underwriter the better. The day after you close, go crazy at the furniture store if you want.

    Tim Trumble
    Online Operations, NACA

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