Cash purchase before House Closing

We have the clear to close, but the buyer requested a later closing so we are just waiting 2 more weeks. Now our car just kicked the bucket and we have cash to buy a new one. Cash reserves (not including the cash to close) would still look fine. We'd still have 6mo of mortgage payments on reserve. Would this botch the closing at the last minute?
  • May 02 2014 - Boston
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Answers (4)

Double check with your lender to make sure you are calculating your reserves right. Credit is always pulled at closing for comparison and even if you buy in cash the dealer still has to have you fill out an application, and may pull your credit. You'll have to write a letter of explanation for the inquiry and will possibly have to provide a new bank statement to prove you paid cash. Your file can go back into underwriting and will cause a delay.
  • May 02 2014
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Speak with your lender and let them know what is going on.  
  • May 02 2014
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Paying cash for the car should be fine as long as your credit wouldnt be pulled for any reason which I'd assume it will not since you are paying cash.  You may or may not have to provide upated paystubs and bank statements again even if you have a clear to close now.  Other than that you should be fine.  Do not make any cash deposits into your checking of savings prior to closing.  Especially if you do get asked to provide updated bank statements prior to closing.  If the cash for the car will be coming out of your checking or savings, consult with your mortgage lender to be sure this will not effect your mortgage approval.  Depending on the type of mortgage you are getting, you may be required to show additional liquid reserves (in addition to your funds to close). 

And lastly, check to see that your rate lock is safe and will not be expiring prior to your closing! 

  • May 02 2014
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I might try to wait out the two weeks until closing. It sounds as though you'd be fine, but banks are rather fickle these days. And of course, run it by your mortgage broker. Good luck!
  • May 02 2014
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