5 responses to “Getting a mortgage – Can I use my wife’s 401k loan? (She is not on the mortgage)?”

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  patrick June 19th, 2010 at 21:09

  Maureen

  Yes you can.
  however, the bank will require you to show how you have obtained the funds for the down payment, and you will need to show the loan agreement to them.

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  loanmasterone June 22nd, 2010 at 02:02

  Beverly

  There is little difference in interest rate. The difference is 1/8th. With this small difference you should add your wife to the mortgage loan application. No matter the interest rate you will be able to deduct it from your federal income tax.

  The monthly mortgage payment would be so insignificant,it is not worth arguing over.

  As far as your wife using her 401K to make the down payment, her 401k manager would want to see the mortgage loan application with her name on them.

  There are several plans that allow 401ks to be used as down payments in the purchase of property, for illness and a few other things.

  These things must be proved with documentation. Failure to prove the use of these funds could cause a heavy tax penalty.

  So for what you are attempting to do, the .125 additional interest rate is not worth it.

  You need a mortgage broker that is able to explain these things to you,point out the various penalties for withdrawing from your wife’s 401k plan, the interest rate and payments based on the interest rate and the difference in payments for each rate

  The difference in the purchase of a $350,000 property with 10% down at 5.375% is $1,763.91. The same cost at 5.25% is $1,690.99.

  The difference is $72.92 as oppose to a penalty of approximately 10% for withdrawing from wife’s 401k. Since she is not on the mortgage this might not be possible as a loan to purchase a house that she is not on the mortgage loan application

  I hope this has been of some benefit to you, good luck.

  “FIGHT ON”

• 

  Doctor Deth June 22nd, 2010 at 03:08

  Mike

  how much is that loan payment coming out of her paycheck going to impact you going forward? have you figured that out yet? her paycheck is going to be smaller every week for years because of the loan

  AND – Do YOU make enough on your own to qualify for the mortgage without including your wife’s income? – if you don;t use her credit, you can’t use her income either for mortgage qualifying

• 

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• 

  daeve930 June 28th, 2010 at 16:51

  Matthew

  It’s a long time since I was in benefits, but if your wife isn’t a buyer (nb I said buyer not borrower) we wouldn’t have given her any of her 401(k) to use to buy the house. I don’t think that it would matter if she’s not on the mortgage, but check with her employer. Also check with the lender that they will consider that your asset.

  By leaving your wife off the mortgage, you do realize that if you walk out the door one day and get hit by a bus, the loan is due. She’ll have to pay it off, sell the place or refinance it into her name. She can’t just keep making the payments on your mortgage.

  I can’t imagine finding anywhere in NYC (I’m thinking Manhattan, although that’s not exactly what you said) for only $500k, but the difference is $39 per month. Is that worth your wife’s peace of mind? If she’d have to sell the place without your income anyway, it doesn’t matter, but do consider what will happen to her if you kick the bucket.