I'm in the process of buying my first home and I know the typical advice of not taking out any new credit lines. I'm wanting to start investing in some stocks and was wondering if that would interfere with my loan at all? Should I wait until after closing to invest or jump into it now? Was planning on starting small and not invest more than 2k.
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I assume you talking about investing outside of a retirement account? Did you include that cash in your assets on your mortgage application? Would losing the entire amount affect your ability to close or pay the mortgage?– D StanleyCommented Jan 13, 2021 at 16:48
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Yes, outside of my retirement account. I did include the 2k on my application but it would not affect my ability to close or pay the mortgage. btw, Thank you for your comment/question– JonSCommented Jan 13, 2021 at 16:57
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Have you asked your loan officer about this? What did they say?– Sophie SwettCommented Jan 13, 2021 at 17:49
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2 Answers
People invest in stocks and bonds, and still buy houses.
The issue for your lender is will you have enough cash or cash equivalents when it is time to go to settlement. They want to make sure that you can handle the down payment, and closing costs, and not end up with zero savings.
Moving $2,000 from your checking/savings to a brokerage account, might not be a problem. But the exact number when they get concerned will be dependent on your financial situation, and the size of the mortgage.
Expect that they may request an update to your bank statements just before settlement. They may ask you to explain any inflows or outflows that they can't identify. They will be looking for hidden loans, or other commitments.
You could ask your POC at the lender before moving the funds.
Note: this assumes that you are not getting involved with leverage that could put far more than the $2,000 at risk.
answered Jan 13, 2021 at 17:55
Given that you are in the process of buying, presumably your first home, I would hold off. The mortgage process does not take all that long (typically less than 4 weeks). The money you earn on a small investment will mean nothing to your lifelong bottom line.
Mortgage brokers can be really nitpicky about the strangest things. A coworker, buying his first home, had to explain every transaction from his checking account. Yes that would include the $33 debit card purchase at the gas station every few days. And he would do this every time he bought gas, not just the one time.
I feel like they tend to be a bit more lenient when you buy your next home but not much. The underwriting process is a total pain and having a withdrawal of 2K is just not worth the headache. Wait till the closing happens, then invest away!
