This is an incredibly common question, especially from first time homebuyers. Because the money needed for a down payment is not always easy to come by, lenders of all types allow borrowers to apply money from a 401K loan to their down payment and closing costs.
While taking out a loan from your 401K may seem counterintuitive, because ideally you’ll have to pay this back, most lenders will not factor this eventual payment into your debt-to-income ratio. See below:
To learn more about specific mortgage requirements, be sure to speak with an experience mortgage broker.