Using part of my retirement as down payment?

[brookesmommy2006]

Hi all, I am currently saving up to buy a house hopefully in June or July of this year. I'm really new to the whole process and dont know what I am doing. I'll have $4000 cash of my own. I was going to take $2000 from my retirement savings to put toward downpayment. (Looking to purchase a home $120000-$150000). Can I do this and be pre-qualified without actually having all the money in my account? The group that holds my retirement states that I have to have a contract before they will release the funds, but Im not sure I can negotiate anything without the funds? 

[ShanetheMortgageMan]

Yes, it's fine to use funds from your retirement account for the down payment and/or closing costs.  If you don't have the funds transferred yet, then during the pre-approval process you can tell your loan officer that is what your plan will be and then you will be pre-approved based on the funds eventually being transferred.  You will eventually be asked for the paper trail of the funds going from your retirement account into your bank account, a copy of the check before you deposit it + a copy of the bank statement after you deposit it + a copy of the retirement account statemeng showing the funds have been taken out usually is what the underwriter is looking for.