onehandsolo
Well-Known Member
Hey I am purchasing a townhome and was considering borrowing about 10k from my 401k to help with the down payment. Was wondering how long the process would take thanx.
How long did take for prudential to process your 401k loan
- Thread starter onehandsolo
- Start date
retiredTxfeeder
cap'n crunch
I arranged my disbursement over the phone. Told them how much I wanted the check to be. Told them to do the math as far as the withholding to come up with the gross amount.. (your 401 is pretax) They told me it would take about a week. A week later, knock knock, a guy in brown hands me an envelope with a check in it. Easy as that. I had just passed the 59.5 age where there would have been a penalty.
Mugarolla
Light 'em up!
Withdrawing from the 401 is quick, easy and fast.
The OP wants to borrow against it. Might take a little longer.
retiredTxfeeder
cap'n crunch
UpstateNYUPSer(Ret)
Well-Known Member
I borrowed 8 times when my kids were in college. I had 2 loans going at a time. Each check took about a week to arrive.
To the OP---you do realize that the bank may frown upon you having to borrow for part of your down payment?
UpstateNYUPSer(Ret)
Well-Known Member
401k's are not used to determine total assets so perhaps they don't look for any recent loan activity.
Jackburton
Gone Fish'n
That is not entirely true. While not all of your 401k, among other invest accounts, can be considered as reserves, generally speaking, around 60-70% can be. The reason of course is the fluctuations of retirement accounts.
http://www.thetruthaboutmortgage.com/assets-and-reserve-requirements/
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onehandsolo
Well-Known Member
Yeah I going to borrow against it so that I can make 20% on home purchase. There will be no early withdraw fees and no income tax implications as long as I pay the money back. There is a 75 service fee and the interest rate 4.5%
Overpaid Union Thug
Well-Known Member
I don't plan on ever borrowing from my 401k but I've always heard it was a smart move. I mean why not? Your borrowing YOUR money and paying YOURSELF back with interest right?
Orion inc.
I like turtles
Not true at all. Did it on my first house years ago through my 401k. The bank actually suggested it as I was a first time buyer at that time.
You are paying double tax on it.
UpstateNYUPSer(Ret)
Well-Known Member
Borrowing from your 401k is the last thing you should do.
UpstateNYUPSer(Ret)
Well-Known Member
Most banks will ask for your most recent 6 months of bank statements to see if there were any unusually large deposits which could indicate that you had borrowed the money to make the down payment.
Orion inc.
I like turtles
And as long as you show documentation of where those deposits came from and terms, you're fine.
Orion inc.
I like turtles
If you're very young, it's okay. I wouldn't recommend doing it past 25 years old. Like anything you have to be smart and cautious.
UpstateNYUPSer(Ret)
Well-Known Member
...but if you borrowed $10K from Mommy and Daddy you may have a problem...
Orion inc.
I like turtles
Never had that issue. Always saved and made good amounts of money on each home purchase I did.
I would gladly help my kids out so they could get started in life with little debt. That's what you do as parents. Help your kids have it better than you and so forth.
UpstateNYUPSer(Ret)
Well-Known Member
I agree but it needs to be a gift, not a loan.
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