BECU Financial Advisor

 
Posts from November 2013


Borrowing from a 401K
Taking out a loan against your 401K is usually a less expensive option than a straight withdrawal where you may have to pay income taxes and a 10% penalty, however there pitfalls that you must take into account.  

Most plans will give you only five years to repay the loan.  If you borrow a large amount the payment could be substantial.

If you fail to make the payments or leave your company you may be required to pay back the outstanding balance within 60 days or be forced to take it as a hardship withdrawal that will incur taxes and penalties.

Make sure you understand all of the consequences of borrowing against your 401K.
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Avoid problems when purchasing a home
When purchasing a home or refinancing your existing home the last thing that you want to happen is to find out that upon closing you are no longer qualified.

How can that happen?

When you make your mortgage application the lender is looking at a number of factors including your income, credit score, job history, debt levels and money for a down payment and reserves.

When you get to closing your lender is going to check to make sure that the assumptions on which the loan was originally approved are still valid.

If you do make changes just make sure that they will be favorable in the eyes of your lender.
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