Is it a good idea to take money out of my 401k to buy a home?

Answer 1

No. After taxes and the 15% penalty, you are looking at probably a $37,000 hit for every $100,000 you take out. The major exception is if you are dignosed with something where you won't see your retirement.

Answer 2

I say it isn't. Different types of creative financing often lead to trouble. Besides, the housing market is still pretty high. Why not save up for another year and use that extra as part of your downpayment? Without knowing more details I can't really give a good answer. If you have a million dollars in your 401k and the house you want costs 40 grand... Overall, I'd say it's unwise to touch your 401k for anything except a dire emergency or retirement.

Answer 3

I may say that it may come to a situation that this asset shall be a liability to you. Anyway, if you are still young then perhaps a good idea to buy because over a period of 15 ++ years, the value may go up until double your initial purchase price. If you are not that young, why bother to buy a house. Rent a good apartment with good community until your last breath and enjoy your money with other activities that you enjoy doing.

Answer 4

No! No! No! Because you will have pay it back to your 401, reducing your take home pay and because you may be taxed on the money you take out. So in effect, you are creating 2 loans w/interest. The first is paying back the 401 and the second is the actual mortgage. Explore other options first.

Answer 5

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