Providing home loan mortgage financing in Lake, Geauga, Mahoning, Columbiana, Erie, Sandusky, Seneca, Wyandot, Putnam, Hancock, Ottowa, Fulton, Williams, Henry, Defiance, and many more Ohio counties.
Providing financing in Lucas, Cuyahoga, Lorain, Medina, Wood, Summit, Montgomery, Licking, Deleware, Warren, Hamilton, Butler, Franklin, Fairfield, Stark, Wayne, Knox and many other Ohio counties.
Providing home mortgages in Findlay, North Ridgeville, Highland Hills, Beachwood, Moreland Hills, Ashtabula, Rock Creek, Delaware, Franklin, Brunswick, Geauga, Grafton, Lorain, Green, Bath, Sandusky, Port Clinton, Huron and many other Ohio communities.
Providing mortgage financing in Cleveland, Cincinnati, Toledo, Bowling Green, Columbus, Akron, Canton, Avon, Strongsville, Avon Lake, Solon, Dayton, Medina, Wooster, Youngstown, Alliance, Mentor, Elyria and many other Ohio cities.

401K for down payment 

Many home buyers today are using funds from their employers 401K account to make the down payment obligations on a house. Normally, you cant withdraw money from your 401K plan unless you become disabled, leave the company, or retire, but many company plans permit certain "hardship withdrawals" in cases where there may be a need to resolve a heavy financial situation, such as the purchase of a principal residence.

It is important to beware of the caveats of hardship withdrawals. There are taxes and penalties involved on the amount withdrawn from your plan. A better way would be to borrow against your 401K. The interest you pay on the loan goes back into your account, and the money you receive is not taxable as long as its paid back.

A loan from your 401k account is usually at a very good interest rate. This rate will be better than the rate you could get on the second mortgage if you were to try to finance your home purchase with an 80% first mortgage and a 20% second mortgage, also commonly referred to as an 80/20 combo loan.

With the large amounts of 100% financing programs available today you should think twice before tapping into your retirement funds. The money you withdraw from your 401K will cost more over the long run then it may be worth in terms of payment reduction. Always consult a financial planner before making this important decision that can affect your financial future.

One thing people don’t consider when taking a loan against their 401k is the "opportunity cost". If it takes you a couple years to repay the funds that time that you are missing out on the opportunity for growth in those investments, this could easily be 10% or more.

Not only should you speak to a mortgage professional, but also a retirement specialist as well. He or she should be able to tell you if pulling money out of your 401k is the best decision for you or not. It's always best to look at something long term rather than short term. This is why talking to a professional would be best.

One thing to remember if you are going to take a loan out on your 401k to use for a down payment and/or closing costs is that you will need to document the terms of the loan. Your lender will need to know how much the loan is for, how long the repayment period is and what the monthly payments will be on the loan. This loan will go against your DTI (Debt to Income Ratio). Therefore, have your mortgage broker make sure that you will still qualify for the mortgage loan with this figured into your debt ratio before actually taking the loan out.


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