@Anonymous wrote:My wife and I will be relocating for me to start a new job September 1. I have accepted a position in the same field with a signifcant step up in pay. She will make a lateral move, but won't really look for a job until we get closer to the move. The position comes with a signficant "signing bonus" as well. The bonus is structured as a forgiveness loan (i.e. I get the full amount up front, and they forgive 1/24 of the loan every month for the first two years I am there). We have FICO scores around 700 right now, not a single negative on the report other than debt levels. We don't really have significant cash savings right now as we have been paying down debt. We have about 40K in credit cards, 60K in car loans, 120K student loans, 160K in retirement accounts. We probably have about 10K equity in our current house after realtor commission/closing costs, but can't count on having that at closing. The bonus is plenty for a 10-15% downpayment at the price level we want, or we could put less down and pay off the credit cards to boost our FICO. DTI won't be an issue even if we don't sell our current house before.
Big question is, are they likely to allow us to use the signing bonus/forgiveness loan for the down payment on a conventional loan? Secondary questions would be should we take some of the bonus and pay off the short term debt, and if so when should we do that? We can't take a loan from our retirement accounts, but could theoretically use the 60 day transfer window for the down payment depending on the timing of closing.
The amount of CC debt you are carrying seems very high... Were you living off of the cards while unemployed or underemployed? I would totally pay those suckers down and rent something for a yr or so so that you can scope out the neighborhoods in the new city...
FICO 9: 
Filed Chapter 13 on 6/1/2017 after job loss. Discharged 6/1/2022.
Goal: Gardening!
Filed Chapter 13 on 6/1/2017 after job loss. Discharged 6/1/2022.
Goal: Gardening!
To answer your original question, they are likely to not accept the signing bonus as a downpayment source since it would be a loan. That is basically unsecured. They will let you use a retirement account loan since it is secured by your assets. You could use the 401k disbursement as a down payment and replace it with your sign on bonus. Talk to a cpa before you do that to make sure it will all shake out in the tax code!
FICO 9:
Filed Chapter 13 on 6/1/2017 after job loss. Discharged 6/1/2022.
Goal: Gardening!
Filed Chapter 13 on 6/1/2017 after job loss. Discharged 6/1/2022.
Goal: Gardening!
Basically it would be an indirect rollover. If you indicate using those funds as a downpayment, the lender may include your tax liability as a debt. Again, talk to CPA and LO and ask about the details! You apparently have 60 days to rollover funds
FICO 9:
Filed Chapter 13 on 6/1/2017 after job loss. Discharged 6/1/2022.
Goal: Gardening!
Filed Chapter 13 on 6/1/2017 after job loss. Discharged 6/1/2022.
Goal: Gardening!