Posts: 15
Registered: ‎12-28-2010
Re: Can savings come from 401k? or must be from "savings" account?

You need to know from your lender how long the funds need to be "seasoned" in other words how long they need to be sitting in that savings account so that their source is not in question. As for a 401k loan some lenders will consider that loan as part of your debt for your DTI and some will not. Our lender didn't care that our funds came from a 401k loan  but needed them seasoned for two months. I also would recommend a loan over a withdrawal as you are taxed when you withdraw the funds even when buying a primary residence.