Should I withdraw money from my 401(k) to pay off a loan, so I can proceed with obtaining a mortgage?

I was told a week prior to our scheduled closing on our new home that we need to get our DTI% down 6%. In order to do this, we would need to pay off our car loan of $12,700. (The resale of the car is approximately $9,000) The only way we could do this would be to take that amount from my 401(k), on top of the amount we are already liquidating for the down payment. Is this an advisable strategy? It is either this option or we will risk losing out on the new house.

Debt, 401(k), Real Estate
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December 2016
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As mentioned elsewhere, the big takeaway here is that you probably should not be buying this home if purchasing it destroys your liquidity to the extent that you cannot access $12,000 by any means other than tapping into your 401(k), which you have already depleted in order to make the down payment.

You sound like you are biting off more than you can chew. Losing out on the new house could well be a financial blessing.

December 2016
December 2016
December 2016
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