will a 401k loan count towards my debt to the mortgage lender?

Absolutely, just understand that depending on your 401K it still becomes a debt & you also may have to pay penalty.

Taking or borrowing money from a 401k retirement program is an extremely common and popular source of down payment money. You can usually take a permanent withdrawal from most 401k programs WITHOUT penalty to buy a home, or save a home from foreclosure. You will get a 1099 for the "income" at the end of the year, but no penalty. On the other hand, you can almost always take a 401k loan too. As it is a loan, you will be required to pay it back to your 401k, so there are no penalties or anything. Most let you borrow up to 50% of what is in your account. Finally, contrary to previous incorrect answers, traditional loan programs DO NOT count 401k loans into your debt-to-income ratio. I lend in the upper midwest states of WI, MN, IA, ND, SD. Click on my name or got to JoeMetzler.com for more information. NMLS 274132

Hi Gabey,Yes, you can take out a loan against your 401K to help with your down payment & NO it will not count towards your debt!| John Burke | Senior Mortgage Banker | Lending in ALL 50 states |Great Plains Bank | jburke@gpbankTX.net | (877)228-9069 | NMLS# 787231 |