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asked Jan 3 in Refinancing by anonymous

1 Answer

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Hello, and thank you for writing. Most mortgage lenders and programs do not require that this payment be considered in your debt-to-income calculation. This makes it easier to be approved for a larger mortgage.

However, just because the LENDER doesn't consider this payment doesn't mean that YOU should ignore it. After all, it is an obligation that will come back to bite you if you can't repay it on time -- 401(k) loans have limited terms, and after those terms expire, you will almost certainly (unless you're over 59 and 1/2 and working, or over 55 and retired)  taxed on the balance and hit with a ten percent penalty as well.
answered Jan 3 by GinaPogol (34,800 points)
edited Jan 4 by GinaPogol
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