Can I withdraw money from my 401 K for a downpayment on a home without paying a penalty for early withdrawl?
52donnie asked:
My wife and I are buying a house and want to use some money from my 401 K to finance the downpayment. I’ve heard this can be done without penalty if the withdrawl is for the purchase of a primary residence. Is this true?
My wife and I are buying a house and want to use some money from my 401 K to finance the downpayment. I’ve heard this can be done without penalty if the withdrawl is for the purchase of a primary residence. Is this true?
No.
I WOULDN’T DO THIS.
The 401k is for retirement. Period. If you take money out now, it will hurt your retirement later.
I would do a loan with as little down as possible. Even a 100% loan (80/20).
However, i suggest that your total monthly payment isn’t more then 28% of your gross monthly incomes.
As I understand it you can pull up to 10k without penalty.
Another option for you to consider woud be to convert your 401k into a self directed IRA,or if you already have an IRA, try that as well/instead.
Using the self directed IRA you can buy your home as an investment.