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Valued Contributor
MovingForward_2012
Posts: 3,406
Registered: ‎12-19-2012

Re: Can savings come from 401k? or must be from "savings" account?

I just saw your last post. My closing costs are also $8000. Our home is a new spec build that is finished and ready to go.

We received a lender credit that covered all of our closing costs minus $400. As well as a $5,000 lender credit towards the purchase price. To get these credits we had to go through the builder's lender. Are you going through the builder's lender?
Cards: Orchard Bank ($1100) | Cap1 Cash Rewards ($2500) | Chase Freedom ($1000) | Best Buy ($2500) | Discover It ($1000) | Barclay Rewards ($2500) | Current scores: EX FAKO: 684, CK TU: 649, FICO EQ: 680, FICO TU: 698, FICO EX: 658 Happy Homeowner Since 2/6/13! :smileyhappy: Last App: 4/5/13 Gardening until July 2014
Regular Contributor
ccubedzx3
Posts: 171
Registered: ‎04-30-2012

Re: Can savings come from 401k? or must be from "savings" account?

Moving-Thanks for all your input! I appreciate it.  So from what I understand, you only had to show up at closing with $400?!?!?! Wow...what a dream that would be!

 

I'm hoping for a similar result.  We are still about 90 days out from closing (just about to do insulation, before the drywall)  so I still have time to get my ducks in a row with the 401k loan. 

 

If I have $20k in my 401k, and my wife has the same amount in herrs, will they treat it as such that we have near $40k in "savings or reserves?" 

 

I just don't want to have a headache because the money isn't technically liquid...

 

 

 


Starting Score:5/22/10 590
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Valued Contributor
MovingForward_2012
Posts: 3,406
Registered: ‎12-19-2012

Re: Can savings come from 401k? or must be from "savings" account?

We haven't closed yet so the $400 is an estimate. We are about two weeks from closing.

You can take out up to 50% of your 401K as a loan so in your case, $10,000. I haven't run across any requirement for a particular amount of reserves at closing through my lender but I plan to call my LO today to double check.
Cards: Orchard Bank ($1100) | Cap1 Cash Rewards ($2500) | Chase Freedom ($1000) | Best Buy ($2500) | Discover It ($1000) | Barclay Rewards ($2500) | Current scores: EX FAKO: 684, CK TU: 649, FICO EQ: 680, FICO TU: 698, FICO EX: 658 Happy Homeowner Since 2/6/13! :smileyhappy: Last App: 4/5/13 Gardening until July 2014
Regular Contributor
ccubedzx3
Posts: 171
Registered: ‎04-30-2012

Re: Can savings come from 401k? or must be from "savings" account?

Is your house completed? Did your builder give you a date as to when you need to close by? 

 

My lender told me to get back to them when we are about 45 days from completion to lock in a rate.  Even once the house is completed, isn't there another period of time where you do a walk through and inspect for any damages, or anything that may need to be fixed before you actually move in? 

 

I'm just curious to the timeline of events that takes place once the house is complete according to the builder.  My lender said they won't appraise it until the house is completed. 

 

 


Starting Score:5/22/10 590
Current Score: 6/11/13 670
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Valued Contributor
MovingForward_2012
Posts: 3,406
Registered: ‎12-19-2012

Re: Can savings come from 401k? or must be from "savings" account?

Yes our house is fully complete except for the landscaping that the builder will finish in the Spring. We have had the code to the door since we signed the contract on 1/5 and can visit when we like. We have come over several times to plan out where items will go and what additional furniture is needed to purchase after closing. We also made a list of things that need to be fixed and also will have an inspector go through and make sure all the new appliances are installed right and working correctly. Yes, you want to make a list of everything that needs additional work as once you close, those minor details are your responsibility. The new house came with brand new appliances! A stainless steel fridge, microwave, stove, oven, and dishwasher plus a washer and dryer

I talked with my LO yesterday about required reserves to close and he said it is typically based on credit score and since my score is a 703, they will not require that I show a certain amount of reserves. Every lender is different and I am going through UAMC and then after closing, the loan will be sold to our local housing authority and they will service it over the life of the loan.

We need to close by 1/31...end of this month. I put an offer in and earnest money down on 1/2, signed contract on 1/5, and receive loan commitment letter and conditional approval on 1/17. First preapproval was on 12/31, switched to builder's lender and got second preapproval on 1/5. I had to switch lenders to get $8000 in closing costs and prepaids paid by builder and $5000 off the purchase price of the home. Our estimated cash to close is $400 and $12,000 in downpayment is being rolled into a second mortgage. The appraisal is due back Mon or Tues. so your correct that it won't appraise until the house is completed.
Cards: Orchard Bank ($1100) | Cap1 Cash Rewards ($2500) | Chase Freedom ($1000) | Best Buy ($2500) | Discover It ($1000) | Barclay Rewards ($2500) | Current scores: EX FAKO: 684, CK TU: 649, FICO EQ: 680, FICO TU: 698, FICO EX: 658 Happy Homeowner Since 2/6/13! :smileyhappy: Last App: 4/5/13 Gardening until July 2014
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chriscarter
Posts: 3
Registered: ‎01-28-2013

Re: Can savings come from 401k? or must be from "savings" account?

I would take the loan, but be sure to pay it back before the serious penalty cutoff. Early withdrawal will cost 10% plus ordinary income tax rate. The seasoning may not be an issue with a letter of explanation and original withdrawal/deposit slips. It's your money in both places, you will just have to fully document the transfer. Show how the money got into your 401K, then how it went from there to your checking/savings.

Valued Member
daninicole
Posts: 29
Registered: ‎01-23-2013

Re: Can savings come from 401k? or must be from "savings" account?

Tshope4205 this is not truly concerning your question (sorry) but I see that your scores went up tremendously in a short amount of time. I really would like to know how you did it. I am now where you started from and I would lIke to get where you are (and are headed to). I have my townhouse up for sale and hubby and I plan to buy  our dream home in a year or so but we both need to make some major credit improvements. if there is a forum where you may have explained  this, please let me know and I will head over that way. Good luck with closing!! Thanks!

Valued Contributor
JM-AM
Posts: 3,303
Registered: ‎06-09-2010

Re: Can savings come from 401k? or must be from "savings" account?


daninicole wrote:

Tshope4205 this is not truly concerning your question (sorry) but I see that your scores went up tremendously in a short amount of time. I really would like to know how you did it. I am now where you started from and I would lIke to get where you are (and are headed to). I have my townhouse up for sale and hubby and I plan to buy  our dream home in a year or so but we both need to make some major credit improvements. if there is a forum where you may have explained  this, please let me know and I will head over that way. Good luck with closing!! Thanks!


Sometimes Daninicole its just about the timing.

Many different things can impact your scores. Some things fall off over time which improves your score. Some things have to be worked on.

 

Every one has a different situation. Best thing for you to do is go to the rebuilding board and ask questions, and do some searching and reading. You will learn plenty and know how to start improving your scores.

Good Luck
May all your dreams and wishes become a reality!
Valued Member
tshope4205
Posts: 39
Registered: ‎11-09-2012

Re: Can savings come from 401k? or must be from "savings" account?

Hi Daninicole - just saw this - previous poster is right, it really does depend on the situation - and the rebuilding credit & credit card boards were tremendously hepful!  As for my situation, I had a few small collections that I paid & got deleted, you should be able to find a lot of information on that situation on the boards if that applies to you.  I then also paid down my credit cards from about 80% utilization to about 10% utilization.  It took a bit of cash, but it was totally worth it - as it jumped my score up so quickly.

 

Hope this helps! 


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jbraeking
Posts: 1
Registered: ‎09-26-2010

Re: Can savings come from 401k? or must be from "savings" account?

You may be able to take a no penalty withdrawal on 401k for a primary residence. A financial advisor is needed to avoid a mistake costing thousands. Good luck!

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