This may seem like a dumb question, but I thought I'd ask. I'm planning to refinance soon and my income is good. I also have a considerable amount of money in a plan like a 401 k. It's money I could borrow from in an emergency. Would I list that as an asset when I apply ? Any advice would be appreciated. Thanks, Sportsfan
refinance should you claim ira savings ?
Feb 05, 2008
4 Replies
No reason not to list it. The bank will consider it in the big picture depending how they look at the numbers. That savings goes towards showing how much you spend and save, but in general, savings counts less than income and current debt obligations. JOE
My last refinance, the broker told me 401k assets were factored in at
70% (so 70% of my 401k is an asset). I assume the other 30% is the taxes I owe on that money.Ask the lender. Meanwhile, a few observations and caveats:
A distinction between "asset" and "collateral" seems appropriate here.
By law, IRAs may not be used as collateral for a home mortgage. Whether it can be listed as an asset, though, is another matter.
I cannot find anything on what the law says about using
401(k)s as collateral.Be cautious with your lender. As you may have read, many lenders have been way too loose in lending standards. Make sure you can afford the terms of your refi-ing.
I would trust Usenet (well, with enough input and citations) more than a lender these days to give me the facts on what the law allows re lending standards.
Of course a loan from a 401(k) is secured by the account itself, but a
401(k) may not be pledged as collateral for any other loan. I'm sure a bit of the google will uncover the exact law stating this. JOEJoin the Discussion
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