Does a 401k have any effect when refinancing?

[Jae_cubed]

I was just wondering if a 401K has any positive effect when refinancing a mortgage?

Thanks in advance.

[deedee421]

We were able to list our 401K as an asset when we refinanced our mortgage in January. We took out a High Five Refi which was our credit union's version of the HARP loan, so I'm not sure if that is just for HARP loans or if all lenders will consider it an asset.

[kork13]

I'm not sure what impact it does or does not have, but fwiw, my bank also asked about my retirement accounts on my mortgage application when I bought my house last year. As to the precise impact that information has, you'd have to find an actual loan officer willing to discuss those policies with you.

[Jae_cubed]

So it sounds like they do ask about it. Thanks for answering.

[pennrj430]

The Underwriter's generally need to see some liquid assets to see that you have some reserves when underwriting a refi. They usually don't care about retirement or life insurance and stuff like that (money that's not easily accessible). Occasionally the LO or Broker will ask you for non liquid assets to"strengthen the case" to the underwriter if assets are on the low side, income is on the borderline, or loan to value is high. But if liquid assets are reasonable, the LO usually doesn't submit the 401k docs to underwriting.

When underwriting a purchase loan, they usually do want to see everything, even non liquid.

Hope that helps.

[bjl584]

I was never asked about mine. But, I had 20% down in cash, so I'm assuming that had a lot of weight when I bought my house.

P.S.
The fact that a 401K can be used as leverage with a bank when applying for a loan is scary.

[thesimplemoneyblog]

I agree, it is scary that they may count it as assets in a refinance, but they do it anyways! Typically, the underwriters want to see all your liquid assets to make sure that if something happens, you have sufficient assets to pay your mortgage for a while without defaulting outright. Scary though to have that as the culture that it would almost be an expectation to start spending down your 401k despite potential taxes, early withdrawal fees, etc.