401k for part of down payment (loan, payment schedule, loan, bank)

[Cmm1]

I know it's not the greatest idea but we are 45 days apart on closing house 2 and selling house 1. We want to do a loan on the 401k for part of down payment. We are carrying both mortgages for 45 days so money is somewhat limited. We will be making a profit of of over 500,000 which we will apply to mortgage 2 giving us a loan balance of around 225,000.

Question is will the bank look at a401 k loan as part of my dti?

[Pfhtex]

Yes. Can you pull out a disbursement, which will not have a repayment schedule? It would be taxed heavily if you do not pay it back this year, but that seems unlikely.

[Cmm1]

I think disbursement is for emergency use only.

[Pfhtex]

I believe it can be used for the purchase of a home. All caveats apply here, consult your 401k rep......

[SmartMoney]

To answer your question, no, 401k loans are not included in the dti, however, the repayment cannot be so great you cannot meet monthly expenses.

[Cmm1]

Thanks smart money! We are borrowing with the bank with their knowledge that our house is currently under contract but has a later close date than our close date on new house. We would also be putting the monies back in the 401k at the conclusion of the sale of our current house.