refinance

[wsp]

Participant has 2 loans outstanding. Plan only allows for 2 loans at any one time.

Loan 1 has 1 year remaining

Loan 2 has 18 year remaining on loan whose purpose was to buy property and build a home.

Participant is at final stages of refinancing the original bank loan from a building loan to a home loan. However, builder is now requiring payment of amount owed to him by end of month and refinancing won't be completed in time. If participant fails to pay the builder then she'll get a credit ding which will cause her refinancing to fall apart (evidently her low rate is contingent on no late payments on her credit report). Participant inquired about refinancing loan #2 to add the 6k that she still owes. Account balance is sufficient to add the additional 6k.

Can I refinance the 401k loan over the remaining loan period to pay this obligation on the original home?

[david rigby]

Participant has 2 loans outstanding. Plan only allows for 2 loans at any one time.

...

Can I refinance the 401k loan over the remaining loan period to pay this obligation on the original home?

Would that be 3 loans?

What does the plan say?

[wsp]

Participant has 2 loans outstanding. Plan only allows for 2 loans at any one time.

...

Can I refinance the 401k loan over the remaining loan period to pay this obligation on the original home?

Would that be 3 loans?

What does the plan say?

Plan says 2 but was thinking that if it's refinanced over original period it wouldn't count as a new loan so I stay within that parameter. don't I?

However, I'm not quite sure it falls within the "purchase" of a principal residence which would allow me to use that option either.

We can always amend the plan to allow more loans but client only wants to do that as last resort.