Need More Money For A Down Payment? Try This Mortgage Option.
If you are short on a down payment, you can get some extra cash by using your 401k account. You should talk to a certified financial planner or accountant first, but 401k money can be a great asset to have if you are short to close on your dream home.
These 5 steps will help make the home buying process as quick and painless as possible.
Step 1: Copy of your 401k
The first step to buying a home with 401k money is to get the most recent copy of your 401k statement. You need to find out how much money you have, how much money you need, and any 401k terms that limit withdrawal amounts or lending amounts. 401k’s have different rules depending on the institution administering the 401k, so always talk to your 401k administrator to understand your options better.
Step 2: Requesting the liquidation paperwork
The next step is requesting the liquidation paperwork. You need to call your 401k administrator to make sure you meet their guidelines for withdrawing money out of your 401k account. If you meet the guidelines, complete the paperwork to request the funds.
Step 3: Copy of the 401k check
Once you follow the guidelines, the next step is to get a copy of the 401k check. Typically checks come through the mail or a wire deposit from your bank or credit institution. We need a copy of the check or transfer to verify the funding amounts.
Step 4: Copy of the deposit slip
Fourth you will need a copy of the deposit slip to show the money coming from your 401k account to your checking or savings account. Also, when you receive the money in your checking/savings account, please do not move it around. It’s a lot easier to keep it all in one place for the processors, and it will cause fewer hiccups. For example, if you need 10 thousand dollars from your 401k to finish the transaction, keep the 10 thousand in the same account.
Step 5: Bank printout
Once the money has arrived in the account, get a bank printout showing that funds were received. Beyond the down payment, make sure you have enough money to cover closing costs in the same account. Again, don’t move money around. Not only should you not move the 401k funds, in general, don’t move large sums of money during the process. If you move money, the underwriter needs to track the funds, and it could derail your deal or delay your closing.
Follow these steps, and close quicker with less hassle.
If you are interested in using your 401k account to help buy a home, contact Chissell Mortgage today at (727) 376-6900.
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