Borrowing from a 401(k) to Make a Down Payment Make sure you understand the rules and risks before tapping your retirement savings to pay for a home. By Kimberly Lankford , Contributing Editor.
Excellent post Miranda, very nice job of looking at some of the pitfalls of using IRA and 401(k) money for a down payment. Realizing that in some cases these funds are needed to buy a house, I suggest avoiding the use retirement funds to buy a house.
Don’t Tap Your 401(k) for a Down Payment Withdrawing money from your retirement account to buy a house has several drawbacks. By Kimberly Lankford , Contributing Editor May 12, 2008
Can I use a 401k loan for a down payment with an FHA loan? Find answers to this and many other questions on Trulia Voices, a community for you to find and share local information. Get answers, and share your insights and experience.
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Yes, in some cases you are able to take funds from your 401(k) to purchase a house. Your Roth IRA and/or traditional IRA would be a better source of funds, however, if you are a first-time home.
Typically, money cannot be withdrawn from the account until you reach age 59 without paying an early-withdrawal penalty, but the Internal Revenue Service permits 401k plans to allow loans, which let you access funds from your 401k plan without a penalty. If you use the loan for your home, the repayment period can be extended.
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But can you save for both retirement and a down payment at the same time? And, if you must choose, which should be your priority? The answer is, of course, complicated, and depends on some individual financial factors. But, in general, save for retirement first. Emotionally, most us of will want to save for a home first.
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Whether it is beefing up your savings, destroying some debt or making a down payment on a house. spend a few minutes on retirement. How is your 401k? Are you contributing at least enough to get the.
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Buying a home can be a big step towards securing your financial future, but saving for the down payment can be very time-consuming. However, if you already have money in your retirement accounts, you might be able to use it to speed up the process.