Updated 5/23/09

In Todays Real Estate/Mortgage Market, sometimes a down payment can be preferred by a lender. Your 401K is a great way to bring a down payment. Generally though we recommend leaving the 401K where it is and using it simply to verify your ability to save money and to meet the "Reserve of Funds" requirements most lender NOW have.

There are still programs available that require little to no down payment, sometimes with the help of the seller or equity from the subject property you wish to purchase.

Call for details: 336-753-0844

General 401K info

More On Using Your 401K For A Down Payment

 You've finally found the home of your dreams. There's just one thing standing between you and your new house: The down payment.

Many home buyers today opt to use funds from their employers 401(K) program to come up with the down payment on a house. Ordinarily, you can't take money from your 401(K) plan unless you retire, leave the company or become disabled, but many company plans permit certain hardship withdrawals when there is an immediate and heavy financial need, including the purchase of the employee's principal residence.

The drawback to a hardship withdrawal is that you will pay taxes and penalties on the amount withdrawn from your plan, which often must be paid in the year of withdrawal. And while hardship withdrawals are allowed by law, your employer is not required to provide them in your plan. Check with your employers human resources department if you're not sure if your 401(K) plan allows hardship withdrawal.

Another approach may be to borrow against your 401(K) often as much as 50 percent of your account balance. You pay interest on the loan, but the interest goes back into your account. The money you receive is not taxable as long it is paid back and plans can give you anywhere from five to 30 years to pay back your loan.

There are risks involved in borrowing from your 401(K). If you lose your job or leave your employer, you must pay back the loan in full within a short period, sometimes as little as 60 days. If the money is not paid back in that time, it is considered a withdrawal from your plan and subjected to the same taxes and penalties. And while 401(K) accounts can usually be rolled over into a new employers 401K without penalties, loans from a 401K cannot be rolled over.

In addition, because the funds withdrawn from your account are no longer earning compound interest, your account will be smaller when you retire. And youll be replacing pretax money with after-tax money.

Some lenders will count the money you borrowed from your 401(K) as an additional debt that will go along with your car payments, student loans and credit cards. While it may seem unfair since you are borrowing your own money, most lenders view it as a payment obligation that affects your debt-to-income ratio in qualifying for a home loan. It may be a factor in whether you decide to make a hardship withdrawal from your 401(K) and pay tax penalties or borrow against it.

 Call Now 336-753-0844

Find Out Local Community Points Of Interest In NC In Each Of The Following Cities

 Winston Salem, NC--Forsyth County, Kernersville, NC--Forsyth County, Mocksville, NC--Davie County, Greensboro, NC--Guilford County, Germanton, NC—Stokes/Forsyth County, Rural Hall, NC—Forsyth County, King, NC--Stokes/Forsyth County, Mt Airy, NC--Surry County, Asheville, NC--Bucombe County, Raleigh, NC--Wake County, Burlington, NC--Alamance County, Statesville, NC--Iredell County, Hickory, NC--Catawba County, Wilkesboro, NC--Wilkes County, North Wilkesboro, NC--Wilkes County, Elkin, NC--Surry/Yadkin County, Advance, NC--Davie County, Clemmons, NC--Forsyth County, Lexington, NC--Davidson County, Cary, N.C.--Wake/Chatham County, Chapel Hill N.C.--Orange County, Huntersville, NC-- Mecklenburg County, Monroe, NC--Union County, Mooresville, NC--Iredell County, Charlotte, NC--Mecklenburg County, Matthews, NC--Mecklenburg County, Waxhaw, NC--Union County, Lewisville, NC-- Forsyth County, Troutman, NC-- Iredell County, Oak Ridge, NC-- Guilford County, High Point, NC-- Guilford County, Summerfield, NC-- Guilford County, Colfax, NC-- Guilford County, Archdale, NC-- Randolph County, Trinity, NC-- Guilford County, Stokesdale, NC-- Guilford County, Pleasant Garden, NC-- Guilford County, Pfafftown, NC-- Forsyth County, Tobaccoville, NC-- Forsyth County, Bermuda Run, NC-- Davie County, Thomasville, NC-- Davidson County, Denton, NC-- Davidson County, High Rock Lake, NC-- Davidson County, East Bend, NC-- Yadkin County, Boonville, NC-- Yadkin County, Walnut Cove, NC-- Stokes County, Asheboro, NC-- Randolph County, Randleman,  NC-- Randolph County, Cooleemee, NC-- Davie County, Browns Summit, NC-- Guilford County, Sophia, NC-- Randolph County, Climax, NC-- Guilford County, Whitsett, NC-- Guilford County, Julian, NC-- Guilford County, McLeansville, NC-- Guilford County, Gibsonville, NC-- Guilford County, Myrtle Beach, SC, Columbia, SC, Charleston, SC several cities in California and Florida to name a few. VanDyk Mortgage, Inc. has branches in most all states in the US, this allows us to lend almost anywhere in the U.S.  VanDyk Mortgage works with over 300 of the top lenders as well as the niche lenders for hard to fund Loans. Lenders such as Bank Of America ( B of A ) BB&T, Wachovia, Sun Trust, Wells Fargo and many others