topic Re: Employer Restricted Stock an Asset? in Mortgage Loans

Employer Restricted Stock an Asset?

MBOhio2 — Wed, 09 Feb 2011 16:40:34 GMT

This is an admittedly elementary question, but I am not very investment savvy, especially regarding employer grants.

I am working toward purchasing a home in early 2012. I received a grant of restricted stock of my company as part of my job offer. The shares currently value at $16K total and will about $5K will be vested by early 2012. Will the vested portion of the stock count as an asset? Also, will the un-vested portion benefit me in any way? Regarding the remaining unvested portion, about $5K will vest in early 2013 and about $6K will vest early 2014.

I just want to get a sense of how this stock could help me in buying a home (though I don't plan to sell any of it, just want to hang onto it as an asset).

Re: Employer Restricted Stock an Asset?

Anonymous — Wed, 09 Feb 2011 17:45:12 GMT

I am not stock savy either, but the bottom line is that to be counted as an asset/reserves it has to be liquid. Any amount of the stocks you can liquidate quickly will likely be countable that way.

Re: Employer Restricted Stock an Asset?

Lel — Wed, 09 Feb 2011 18:05:49 GMT

This has come up before. From what I recall, basically only the vested amount can be counted towards your assets, since the unvested amounts are not actually available to you at the time of application.

Re: Employer Restricted Stock an Asset?

MBOhio2 — Wed, 09 Feb 2011 18:21:25 GMT

mickie and lel - thanks for the info.

I assumed that any vested portion would be an asset since I fully own it and could sell it for cash at any time, but wanted to make sure. Also, I wasn't sure if a lender would look at the soon-to-vest portion as at least a security blanket coming in the near future. I mean, I could lose the job, it wouldn't vest, etc so it's certainly not that big of a benefit, but again, was curious if it would even enter their minds as a positive.

Re: Employer Restricted Stock an Asset?

Anonymous — Wed, 09 Feb 2011 18:46:52 GMT

it will not. They only look at liquid assets, not future possibilities.

Re: Employer Restricted Stock an Asset?

llecs — Wed, 09 Feb 2011 19:56:16 GMT

@Lel wrote:
This has come up before. From what I recall, basically only the vested amount can be counted towards your assets, since the unvested amounts are not actually available to you at the time of application.

+1. I have a bit in a 401(k) and 100% was vested. When I went through the process last month, they double and tripled check to make sure it was all vested so as to declare it an asset.

Re: Employer Restricted Stock an Asset?

MBOhio2 — Wed, 09 Feb 2011 21:22:57 GMT

Thanks for the addiitonal info llecs... I assumed that only stock that was really "mine" would count.