Can I buy a luxury item before closing on a house?
Making large discretionary purchases before closing a home loan can negatively impact your credit score, alter your debt-to-income ratio, and force lenders to re-qualify your mortgage. These financial dips and underwriting changes can significantly delay the homebuying process or cause you to lose your financing entirely.
What people tried
Every workaround mentioned in the threads below. We haven’t tested any of them — and nobody here is claiming they worked.
- 1Waiting until after closing on the home purchase
- 2Keeping the current phone if it is still working fine
- 3Financing the purchase at 0% interest
- 4Waiting until after closing to make the purchase
- 5Paying cash for the purchase so it doesn't affect credit or financing
- 6Saving up cash to buy automobiles without financing
In their words
Unedited, grouped by where they were said, most upvoted first within each place, each linked to the thread it came from.
“Assuming you are financing the property, never ever make big purchases before close. That can screw up you loan, cause you to lose financing, and then be unable to close”source ↗
“Wait to after you close as it will affect your credit score and debt to income ratio.”source ↗
“Noooo do not buy anything huge. They will have to re-qualify you. And yes that’ll be fine but will delay the process.”source ↗
“If you finance the truck your credit will take a small dip when they pull your credit and you start a new loan.”source ↗
“Financially, I can afford an iPhone today, but emotionally I'm worried that once I have a home loan, spending ₹80k–₹1.5L on a phone will feel irresponsible or won't happen for years.”source ↗
Where this came up
People with this problem also raised
- 8Is a luxury home upgrade worth giving up financial flexibility?
- 5Should I buy my retirement home now or wait 5 years?
- 4Where should I invest money I need in two years?
- 2Buying a new house before selling the current one
- 6Where should I keep my house down payment?
- 17Should I buy property or keep my money invested?