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401K or Retirement Accounts It's helpful to provide information about your retirement accounts or 401K programs because this is another asset you could draw upon as reserves in case of a problem. It is also another way to show you have a savings history. Just provide a copy of your most recent statement to your lender. Many people use these accounts as a source of funds for their down payment, too. Some employers allow you to "cash out" a portion of the 401K and some allow you to borrow against it. Be sure to keep copies of all paperwork involving the transaction. If they cut you a check, be sure to make a photocopy of that, too, including any receipt for deposit into your personal bank account. If you are borrowing against your 401K, lenders will count this as an additional monthly debt to be repaid. If your debt-to-income ratios are near their qualifying limits, this could be an important consideration. It may affect whether you choose to cash out the account and pay any tax penalty, or simply borrow against it. |
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