The stress is setting in now : (

[Anonymous]

---

@Anonymous wrote:

I just looked and it specifically states that we must provide bank statement showing that we still have such and such amount with such and such bank.  Do you think the 401K will still be considered with that??  I ask because it is listed like this:

"PROVIDE MOST RECENT BANK STATEMENT WITH ***** CREDIT UNION VERIFYING STILL HAVE ASSETS AND RESERVES OF $4,169"

---

I would email a copy of your last 401k statement (most are available online in PDF) along with your most recent bank statement. I honestly don't think you will have any issues now.

TBC

[Anonymous]

We are waiting to hear back from them but I am going crazy so I was just asking what others may have experienced.  They do know we have 401K because they have the statements and it was all listed on the application also.  Hopefully it will all work out.

---

@FrugalRican wrote:

Ask the people you are doing this with.

They are probably asking that specifically because they have no idea you have 401K money.

---

[Anonymous]

Okay... I will request that my mortgage broker email the 401K statement along with the bank statement.  That is a good idea.... it could be like a reminder of what I have... not just what is in the bank.  They do have our 401K statement though so hopefully they are not wanting the funds on top of what we have with 401K.

---

@Anonymous wrote:

---

@Anonymous wrote:

I just looked and it specifically states that we must provide bank statement showing that we still have such and such amount with such and such bank.  Do you think the 401K will still be considered with that??  I ask because it is listed like this:

"PROVIDE MOST RECENT BANK STATEMENT WITH ***** CREDIT UNION VERIFYING STILL HAVE ASSETS AND RESERVES OF $4,169"

---

I would email a copy of your last 401k statement (most are available online in PDF) along with your most recent bank statement. I honestly don't think you will have any issues now.

TBC

---

[Phitor]

---

@Anonymous wrote:

---

@sewmuchdebt wrote:

to satisfy the reserves, aren't you allowed to use 401k/ pension/ ira? i didn't read where it says you have to have cash reserves. i'm just trying to throw any ideas out there that might help

---

+1

A 401k plan IS considered reserves and is just as good as a bank account.

TBC

---

Not to hijack this topic, but this has always confounded me. As far as I know, 401ks are completely and federally protected from bankruptcy through ERISA. So if things got rough at some point after closing, while it might be a good idea, you would not necessarily be forced to use 401k assets to pay mortgages and avoid bankruptcy. So I have always wondered why lenders allow 401k balances to be considered "reserves", when they are specifically protected from being used as such.

[sewmuchdebt]

---

@Phitor wrote:

---

@Anonymous wrote:

---

@sewmuchdebt wrote:

to satisfy the reserves, aren't you allowed to use 401k/ pension/ ira? i didn't read where it says you have to have cash reserves. i'm just trying to throw any ideas out there that might help

---

+1

A 401k plan IS considered reserves and is just as good as a bank account.

TBC

---

Not to hijack this topic, but this has always confounded me. As far as I know, 401ks are completely and federally protected from bankruptcy through ERISA. So if things got rough at some point after closing, while it might be a good idea, you would not necessarily be forced to use 401k assets to pay mortgages and avoid bankruptcy. So I have always wondered why lenders allow 401k balances to be considered "reserves", when they are specifically protected from being used as such.

it's strange to me as well. my pension was protected when i filed chap 7 bk. but, if i were to quit my job, be terminated, or retire my pension would then be available to me. it is in essence a long-term savings account that if something happened to my employment status before i'm eligible for retirement, i can use that money to avoid losing my home.

[Anonymous]

A 401k is a tax haven, a safe zone if you will. It can be used in last ditch efforts for life altering events but is limited and heavily regulated. Primary Home purchase and medical expenses being just some of what would be considered a life changing event or a hardship and are not subject to the 15% penalty. You still have to pay federal tax at 15% and most states do tax your 401k before the deduction.

Lots of people say don't take money out  of your 401k and I have to agree but with one exception of a home purchase. In my opinion a home purchase is a long term investment with the prospect of large gains if you keep up on the maintenance and pay more towards principle than required, present market notwithstanding.

The above statement should not be used as financial advise, and is just my opinion YMMV.

TBC

[Anonymous]

---

@sewmuchdebt wrote:

---

---

Not to hijack this topic, but this has always confounded me. As far as I know, 401ks are completely and federally protected from bankruptcy through ERISA. So if things got rough at some point after closing, while it might be a good idea, you would not necessarily be forced to use 401k assets to pay mortgages and avoid bankruptcy. So I have always wondered why lenders allow 401k balances to be considered "reserves", when they are specifically protected from being used as such.

it's strange to me as well. my pension was protected when i filed chap 7 bk. but, if i were to quit my job, be terminated, or retire my pension would then be available to me. it is in essence a long-term savings account that if something happened to my employment status before i'm eligible for retirement, i can use that money to avoid losing my home.

---

Yes and no. Generally when you have a savings account you don't have the prospect of losing money when the market takes a dive. I would prefer to call it a high risk savings account, that's why most people when getting close to retirement switch to bonds a safe(r) but  lower yield.

TBC 

[Phitor]

---

@Anonymous wrote:

A 401k is a tax haven, a safe zone if you will. It can be used in last ditch efforts for life altering events but is limited and heavily regulated. Primary Home purchase and medical expenses being just some of what would be considered a life changing event or a hardship and are not subject to the 15% penalty. You still have to pay federal tax at 15% and most states do tax your 401k before the deduction.

---

All true, but that is sort of irrelevant to my issue with 401k assets being used as "reserves". My point is that you are protected from using 401k assets to avoid bankruptcy and/or foreclosure, and in some situations, it may make fiscal sense for someone not use those assets. For example, people in the current recession who have been out of work for 2 or more years and have minimal equity in their home, it would make more sense for them to default on the home and retain a higher 401k balance. It all depends on the situation.

The very fact that individuals have the choice whether or not to use 401k funds as emergency reserves, questions lender's willingness to consider them as such.

[Anonymous]

---

@Phitor wrote:

---

All true, but that is sort of irrelevant to my issue with 401k assets being used as "reserves". My point is that you are protected from using 401k assets to avoid bankruptcy and/or foreclosure, and in some situations, it may make fiscal sense for someone not use those assets. For example, people in the current recession who have been out of work for 2 or more years and have minimal equity in their home, it would make more sense for them to default on the home and retain a higher 401k balance. It all depends on the situation.

The very fact that individuals have the choice whether or not to use 401k funds as emergency reserves, questions lender's willingness to consider them as such.

---

Yes it is protected and cannot be taken unless its a divorce but you have to look at it as most banks would. Most people will do whatever it takes to keep their home. If you have it and can if you choose use it,  most people likely will.

99% of people try to do whatever they can to keep their homes. It is a calculated risk and the math works in the favor of the lender.

TBC

[Phitor]

---

@Anonymous wrote:

99% of people try to do whatever they can to keep their homes. It is a calculated risk and the math works in the favor of the lender.

TBC

---

This I can buy...