Refinance > Refinance & Mortgage Tips: Down Payment From 401k Or 403b Retirement Annuities

Refinance & Mortgage Tips: Down Payment From 401k Or 403b Retirement Annuities

by: Tristan Hunt

If you are purchasing a home and have a substantial portion of your assets inside of a retirement account such as a 401K, 403B or other retirement product or annuity, you may choose the increasingly popular option of tapping those funds to make a down payment on your new home. Like any other accounts you may have in your name, such as brokerage accounts and bank checking, savings and money market accounts, most popular retirement accounts qualify as assets to be counted toward your ?reserves?, a measure used by mortgage lenders to determine how many months of payments you must have in order to serve as a buffer covering payments you might miss if there were any interruption of your income.

Retirement accounts such as 401(k) or 403(b) annuity accounts are generally administered or sponsored in whole or in part by your employer. In addition to serving as excellent documentation of your earnings and savings, your 401K or 403B accounts can be used in a variety of ways to help finance your new home purchase. Depending on the specific restrictions applied to your account, you may have the option of withdrawing money directly from the account or ?borrowing? money in the form of a loan (against your own funds) which is repaid at a generally low rate of interest. Regardless of whether you cash money out of your account or take a loan against it, be sure to thoroughly document any details of the transaction, including any withdrawal or loan application paperwork, demand drafts, cashier?s checks, deposit tickets, etc. for the purpose of substantiating this source of funds to your lender.

Lenders do treat down payment money from retirement accounts differently from program to program and state to state, sometimes from case to case. In particular, borrowing money in the form of a loan may increase what the lender?s perceives as your monthly debt obligations, because even though you are borrowing money from your own account, you are still obligated to make a payment every month which you wouldn?t have to make otherwise, and lenders will often consider this to be detrimental to your qualifying DTI or Debt to Income Ratio, making it harder to borrow as much money as you may need. On the other hand, cashing out any type of retirement account will always create a taxable event and sometimes also a penalty fee, which generally accounts to more than the nominal interest rate common to the loan option. Speak with your loan officer about the requirements of your individual program and weight the options with him/her or another trusted financial professional.

You may also consider speaking to your employer about any down payment assistance programs which may be available to you as part of your benefits package. These can come in many forms, but it is important to clarify with your employer that any down payment assistance granted does not amount to a loan and that there is no expectation of payment. Why would an employer want to help you make a down payment? Call them old fashioned, but most companies do want their employees to stick with them, and if your employer helped you achieve ownership of your dream home, how would you feel about them? As with the 401K, 403B or other retirement account options, down payment assistance from your employer should be documented in detail and all copies of communication, checks, deposit tickets and statements of account, along with signed records stipulating that the funds are given freely and not to be repaid, should be kept for submission to your lender.

About The Author

Tristan Hunt is a seasoned financial professional with a wealth of experience in the mortgage and wealth management industries, advising clients on debt consolidation, mortgage refinancing & real estate investor loans. Website: http://www.RefinanceOne.net.

Is There Any Such Thing As Free Debt Consolidation?

by: Talbert Williams

Free debt consolidation - yea right! The fact is, nothing in life

is free, which is exactly why you should be dubious of any

advertisements that claim to offer "free" debt consolidation. In

most instances, you can get a free quote or else a first-time

counseling session. And in most instances, the first-time

counseling session is to lure you into the company's agreement.

Debt consolidation is a procedure that can take years to hash

out. In most case, people with bad credit or current debt

problems often believe there is no way out. They may go online

and find a source that will help reduce their debts, believing

that the amount of their debts is lower. Since few companies will

lead many to believe this is true, it is important that you know

that the debt consolidation companies are only reducing your

rates of interest.

If...

Is There Any Such Thing As Free Debt Consolidation?

Refinance > Is There Any Such Thing As Free Debt Consolidation?

Cash Out Refinance - Things To Know About Refinancing Your Mortgage To Get Cash Out

Cash Out Refinance - Things To Know About Refinancing Your Mortgage To Get Cash Out

by: Carrie Reeder

A cash-out mortgage allows you to refinance your mortgage and pull out part of your equity. Before deciding how much to cash to use, be aware of the impact of PMI and equity amounts. However, you may find the benefits of refinancing outweigh the costs.

Cash-Out Mortgage Basics

With a cash-out mortgage, you can refinance for lower rates or to just get part of your equity out. Once the refinancing process is completed, you will end up with a check. You can decide to take up to 90% of your home?s equity in some cases. However, cashing-out a large percent of your home?s value will impact your refinancing rate and might require you to carry private mortgage insurance (PMI).

The Cost Of PMI

Just like with a regular mortgage, you will be required to carry PMI if you take out more than 80% of the home?s value. PMI protects the mortgage...

Cash Out Refinance - Things To Know About Refinancing Your Mortgage To Get Cash Out

Refinance > Cash Out Refinance - Things To Know About Refinancing Your Mortgage To Get Cash Out

Refinancing With Cash Out

Refinancing With Cash Out

by: Jennifer Hershey

If you have lived in your home for a reasonable amount of time and have acquired equity through appreciation and monthly mortgage payments, you may be considering liquidating some of that equity by refinancing with cash out.

Refinancing with cash out in laymen terms simply means to refinance your existing mortgage and borrow some of the equity in the home to be received in a lump sum at the closing table.

People refinance with cash out all the time and for a variety of reasons. The number one reason being to get a lower rate on their mortgage. The cash out scenario you can use for all sorts of reasons. Such as debt consolidation, buying a new vehicle, home improvement, college tuition, family vacation, etc.

If you are seriously considering refinancing with cash out, you may want to consider shopping around for a mortgage. By shopping around you can compare rates, and fees.

Also,...

Refinancing With Cash Out

Refinance > Refinancing With Cash Out

Bad Credit Mortgage Refinance

Bad Credit Mortgage Refinance

by: Jennifer Hershey

If you are looking to refinance your mortgage but believe you will be unable to because your credit may be challenged by late payments, bankruptcy, charge off?s, or unpaid medical bills to name a few, don?t worry, there is hope.

There are literally thousands of lenders across the United States that specialize in all different types of mortgage programs for people who have challenged credit.

They are not the typical banks you find down the street from your house that deal with perfect credit only. Nor are they hard money lenders that charge outrageous mortgage rates. They are known as wholesale lenders.

Wholesale lenders work closely with mortgage brokers. Mortgage brokers are the people who work with people looking for mortgages in the way of counseling, educating, and locating a loan for people who find themselves in a unique situation and have trouble finding a loan on their own...

Bad Credit Mortgage Refinance

Refinance > Bad Credit Mortgage Refinance

Finding a Mortgage Refinance Advisor

Finding a Mortgage Refinance Advisor

by: Jennifer Hershey

If you are looking to refinance your home for a lower rate, or you are interested in a refinance with cash out to do some home repairs, buy a new car, etc., you may want to consider finding a mortgage refinance advisor.

There are actually two ways you can go about refinancing your home. The first would be to do the shopping around for a refinance on your own. The second way would be to locate a mortgage refinance advisor.

A mortgage refinance advisor. Otherwise, known as a mortgage loan officer or mortgage broker are not at all hard to find.

The internet is perhaps the best resource for tracking down a mortgage refinance advisor. There are literally hundreds of them right in your own back yard, and the internet would be by far the best way to begin your search.

Once you have found a mortgage refinance advisor, don?t stop there, shop around. By shopping around with a...

Finding a Mortgage Refinance Advisor

Refinance > Finding a Mortgage Refinance Advisor

Refinance ink cartridges

Overcoming a Bad Credit History

by: John Mussi

Having a bad credit history can be a huge burden? it can cost you loans and other financing plans, it can cause you to have to pay higher interest rates on credit cards, and it can cause you to have to pay security deposits just to get your utilities or telephone service turned on.

Depending upon how bad your credit is, having a bad credit history can even cost you certain jobs. It is possible to overcome...

Refinance Refinance & Mortgage Tips: Down Payment From 401k Or 403b Retirement Annuities

Refinance > Overcoming a Bad Credit History

Refinance skirt Refinance & Mortgage Tips: Down Payment From 401k Or 403b Retirement Annuities

Bad Credit Mortgage ? Sometimes Bad Credit History Can Be Rewarded?

by: Troy Francis

When you have bad credit you wonder what lenders will offer you for a mortgage deal on your home. The big obstacle, as you know, was your bad credit history. To add to the all the fears, there were a few pals of yours who held that the deals offered to you will not be as good as regular mortgages.

However, before you decide not to mortgage because of bad credit history...

Refinance mortgage Bad Credit Mortgage ? Sometimes Bad Credit History Can Be Rewarded?

Refinance > Bad Credit Mortgage ? Sometimes Bad Credit History Can Be Rewarded?

The Pros and Cons of Broadband Internet Phone

by: Mark Hipp

Most people don't know that they already have everything they need to start saving money using internet telephony, or VoIP. All you have to have is a regular telephone and high-speed internet access. That's it! If you have both of those, you are ready to start saving loads of money on local and long distance phone calls.

It is inevitable that VOIP will replace traditional telephone service at some...

The Pros and Cons of Broadband Internet Phone Refinance

Refinance > The Pros and Cons of Broadband Internet Phone