Yes, usually you can change the amount (with lenders I've worked with). But you are running out of time. Do it now so they can adjust the paperwork and still get the closing disclosure out to you and the title co asap. I am assuming you are in the US and there are time frames the lender has to get this to you. You may or may not have to pay another doc prep fee, ask your loan officer.

As to underwriting again, yes, but you are putting down more, right? Should be a slam dunk since you already have been approved for the higher amount unless you have had other changes since your approval (hope not).

Initially it was 40k down, then I changed it to 55k. But now I want to change it back to 40k once I receive the 55k in the bank. I am still waiting on the closing disclosure docs so I can send a copy out to retirement company to have them give me the 55k for the down payment. Kinda get what I am trying to do here??

And yes I am in California.

Contact your loan officer right away and let him/her know what you plan to do

The notice period for the CD is a Federal requirement. I thought you were putting more down but you aren't, you are putting down $40k rather than $55k so it's not the slam dunk I thought it was going to be in your OP.

Be cautious when you are withdrawing the funds from the retirement fund. Do they restrict you to just what you need for the purchase? Many do. Check the requirements.

Well my inital down payment was on my loan disclosure stated that I put 40k down. I asked for more money thru my 401k, so in turn I change my down payment to the higher amount. What I was going to do was once I received the 55k in my bank, I was going to change the down payment amount back to the original amount on my loan disclosure of 40k, that way there was some left over. Idk if that is going to come back to bite me or not if I did do it that way.

It definitely has the big potential to bite you if you do it that way.

What does your actual loan commitment say? Normally it tells you exactly how much you are borrowing and how much you need to close along with a bunch of other details.

You definitely don't want to tell your retirement fund that you need $55k from the fund to buy your new place and then only spend $40k and keep the other $15k in your bank or spend it on something else. There are checks and cross checks when you are withdrawing from your retirement fund. Check the retirement fund withdrawal guidelines. I wouldn't be surprised if you weren't required to provide a copy of the final signed CD to the retirement fund. That's one way they would catch you.

You have lots to do tomorrow. Don't leave this to the last minute.

Yes I have to provide a closing disclosure and signed purchase agreement to my retirement fund, along with whatever documentation they have me fill out on their end. So I cannot really do much until I have the closing disclosure in hand.

No, I mean the SIGNED CD after you have closed, not the one you have to show for the withdrawal from your retirement fund. The one you are talking about (preliminary CD prior to closing) is for the request. I'm pretty sure they do follow up after you are funded. At least that's what I remember, but each retirement fund has their own rules and their own procedures for Quality Control to prevent fraud and situations such as you are describing where you ask for one amount and then use a portion of it to close and keep the rest. It's your money in your retirement fund; however, there are guidelines you have to follow in order to withdraw the funds. Many funds have restrictions on withdrawals and what you can spend the money on eg. buying a primary home is one example. Don't guess. Find out what your guidelines are for your withdrawal.

Are you borrowing or withdrawing from your 401K? If you are borrowing I think you have more leeway. If you are withdrawing I’d make damn sure that every penny was accounted for in an approved transaction. That money is untaxed and if you are using It to furnish a man cave, buy a car, add to your snow globe collection...you can bet Uncle Sam will be quite interested. He will collect the tax and a nice penalty so you don’t forget.

nini, OP would have already paid the tax & penalty to cash out 401K.

I would strongly advise caution here.

As Denita mentioned each 401k will have different rules for withdrawing funds. Most 401k's are somewhat lenient for loans but much less so for withdrawals. Many have calculations that determine how much you can withdraw based on how you are going to use the money. So if you were allowed $55,000 as a down payment that doesn't mean you would be allowed $55,000 to just stick in the bank. My 401K operates that way.

The same thing goes for payback period on loans, many will allow 10 year or longer payback period on loans for home purchases but typically only 5 for other uses.

If you are using the safe harbor rules for first time home buyers to bypass the 10% penalty then this is not allowed and pretty dangerous. When your 401k finds out they will report it to the IRS and you will have to pay the 10% penalty on the whole $55,000.

Also, it is a little eleventh hour for this. If the lender ran the loan based on $55,000 they may have to run everything by underwriting all over again and the failure to close penalties from your builder could really eat into your $15,000. I started a re-fi in March and bought a new house in cash a week before closing. They asked for a bank statement because it had taken a while to get to closing and wanted an explanation why my bank account was reduced by half. I explained and transferred the cash back in from another account just to be safe and it still added almost a month to the process.

Well our planned walk thru was suppose to be the 6th of Oct, with closing on the 9th or 12th. They have not even painted the exterior, installed the cabinets in kitchen, or bathrooms, installed the tile or carpet, poured the cement for the driveway, etc. They are not gonna be done in accordance with the date on the loan disclosure.

They are not gonna be done in accordance with the date on the loan disclosure.

The date on the loan disclosure doesn't matter. Almost all builders will have a failure to close clause in their contract which gives stiff penalties for you delaying closing once they have the CO. The liquidated damages can snowball very fast. I have seen people rack up more than a thousand in damages just because they didn't sign off on their closing statement 72 hours before the closing.

They generally have no penalty for not being ready to close when you are. If you start something that requires underwriting to look at your loan, you are at the mercy of them. It could be a 2 day thing or it could take a month.

@bry911 is that general, or does it matter from state to state. I am in California, and I believe I read that if builders fail to adhere to the terms in the contract, such as closing on the specified date, then they are in breach of contract.

And I am sorry, I meant to say the puchase contract, not LD.

I am in California, and I believe I read that if builders fail to adhere to the terms in the contract, such as closing on the specified date, then they are in breach of contract.

Let's just go with no... The reality is a lot more complicated, but in practice it really doesn't matter. Your builder is going to insist you pay the failure to close penalty and then you are free to sue him to get it back. Otherwise, you can claim he breached and you can sue him to get your deposit back.

Having said that, builders will usually build language into the contract to protect themselves from breach because of reasonable delays. In practice a delay of a few weeks would not usually be a breach unless you had some sort of time is of the essence clause in your contract.

However, even if it is a breach, what are you going to do? I am assuming that he currently owns the house and lot and he is simply going to tell you to go pound sand or pay the money. There is a massive difference between being right and getting paid for it.

Bri911 nailed it. Check your contract. All the builder contract's I've seen allow 2 yrs in the fine print even though the "closing" is scheduled for a given date. Read your contract so you know.