I am doing a lease-option with a prospective buyer. They would like to get their down-payment from their 401K. Can this be done? What paperwork would I need to submit to get their money out of the 401K? I dont want to shoot myself in the foot, by sending in a copy of the Lease option agreement if thats not going to Cut it. After all, my buyers want to put down $10,000.00
Grant
Grant,
I’m not an expert, but I believe there’s two answers here. A generic 401k loan is not difficult and your TBer’s should be able to get that without any problems, assuming the amount needed is not more than half their balance and they don’t already have a loan outstanding. Also, consider how the repayment will affect their income, especially for a larger loan amount.
Also, I know some companies have specific home ownership programs for the 401k loans. I went through that once, but it didn’t work out for my TBers. The loan had different terms than a standard 401k loan. I also had to provide paperwork as well and was told that a L/O was fine, but then again, the TBers changed their minds late in the game, so I don’t know.
Sorry to not be more help, and please post your results once you know more. Thanks.
I’m also no expert, but I do know that the 401K my company offers allows the employee to request money from their 401K (loan). They make it very easy to do, we just submit a request through the web and in a few days the money shows up in our bank account (they wire it) and the automatic deductions begin from our paycheck. When you do this, there are two loans they allow, one for homes and one for “other”. There are different borrowing amounts for each. My guess is that you shouldn’t have to do any paper work, it’s up to the Buyer. They however, may how to provide a copy of the contract before they can get the money.
Candice