Re-applying - do they look at my original docs? Or start fresh?

[Anonymous]

Denied for USDA guaranteed in Nov. mainly b/c underwriter wanted middle credit 640.  LO suggested re-applying in Feb. when my score has likely gone up to 640.  I know I need to resubmit bank statements, pay stubs, etc... but I'm wondering if they refer back to my old information at all?  Or will they start completely over? 

The reason I ask is b/c the last set of bank statements had a balance of only around $600.  Since then, I deposited a 401k withdrawal which beefed up my balance a lot.  It was 3 bank statements ago and I only need to turn in the past 2.  Just wondering if they'll compare my balance from the first time I applied and then ask for the deposit information?  Or will they just look at it like I've always had that money sitting there since the actual deposit transaction won't show up in the past 2 statements?

(I have all the info if they ask for it - it's totally legit... I'm just curious more than anything.)

[cdtotten]

They most likely will not look at old information at all... there is no need to if there is recent information. My question to you is why you are trying to hide the deposit itself? Your 401(k) account is considered for reserve purposes, so it's nothing that needs to be hidden. Did you take a withdrawl from your account or a loan? Not that I would ever recommend doing either for any reason unless you are of age to withdraw without penalty (no loan).

[Anonymous]

Not sure where you got the impression I was tyring to hide anything.  I specifically said I have all the documents if they ask, and that I'm curious more than anything.... which means the reason I'm asking is because I'm... well... curious more than anything.  Can't make it any easier to understand than that.

[MBOhio2]

I think what cdtotten is getting at is, from a reserves standpoint:

$600 bank balance + balance of your 401k account is the same as higher bank balance that simply came from the depositing the 401K cash

These two scenarios above are pretty much identical in a lender's eyes. A 401k balance counts as reserves just like cash in your bank account does, so regardless of what set of documents (old vs. new) the lender looks at, the picture is the same UNLESS you were trying to hide where the 401k cash came from and you were making it appear like you just had a ton of cash that had been saved. It looks like he/she misunderstood your intentions, but I definitely see where he/she was coming from since cashing out your 401k was uneccesary from a reserves standpoint.

So here's a question, why did you cash out your 401k? Was it to make your reserves look better (which was unecessary since a 401k counts as reserves) or was it because you need the 401k cash for a downpayment, closing costs, etc?

[ReBuildingAgn]

Just my 2 cents. I had this same question for my lender. I asked if I should move money out of my 401K to place into my savings account. She said definitely not as 401k counts as reserves and they will question you moving money around. Her advices was the keep everything where it is.