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Using 401K For Down Payment First Time Home Buyer

We’ll discuss which accounts don’t penalize you when you use the money to buy a first home as well as strategies for saving on penalties and taxes. Using Your IRA for a Home Down Payment The IRS discourages you from withdrawing money from your retirement accounts early by charging a 10% penalty on withdrawals before you turn 59 1/2.

Using an IRA to Make a House Down Payment | Nolo – If you qualify as a first-time home buyer, you can withdraw up to $10,000 from your IRA to use as a down payment (or to help build a home) without having to pay the 10% early withdrawal penalty. However, you’ll still have to pay regular income tax on the withdrawal.

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With the housing market rebounding, more and more people are looking to buy a home. Unfortunately, as a result of the sub-prime housing scandal that.

The rules for IRAs are different than those for a 401(k) and are more favorable to first time homebuyers. As a first time buyer, you can withdraw up to $10,000 from an IRA without paying any.

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I would rather see you all pay PMI than take a 401k loan. Check with your local banks/credit unions and see if they have any first-time home buyer programs.

Is it a good idea to use your 401k for a down payment on a. – Best Answer: You are able to borrow from your 401K plan to use as a down payment in the purchase of a house. Normally using 401K funds you are not normally penalized.

Some good reasons to borrow from your 401 (k) Not to mention closing costs. This is one reason why buyers sometimes borrow from a 401 (k) retirement plan. When you borrow from your 401 (k), you can get the money you want for a home in as little as a week and with nothing more than a phone call.

The good news is that if you have a 401K, you have a leg up thanks to two 401K first time home buyer options . By Gustavo Gonzalez for Coldwell Banker. Coming up with a down payment to purchase your first home can feel like a herculean task.