2007-10-10 05:51:33 · 4 answers · asked by Vic29 1 in Business & Finance ➔ Personal Finance
That wouldn't be a wise option to use. If you take money out, you will owe income taxes as well as the early withdrawal penalty of 10% if you are under 59.5.
You might be able to take a loan out against the 401k, but I wouldn't recommend that either.
Your best bet is to either save up for a downpayment or finance 100% of the mortgage.
2007-10-10 06:09:13 · answer #1 · answered by dfrank04401 3 · 1⤊ 0⤋
Not a good idea. If you are not at least 59-1/2, you will have to pay a 10% penalty for early withdrawl. There are very few exceptions to this and buying a house is not one of them.
You will also have to pay income tax on that money which will probably put you in a higher tax bracket.
You might check with your plan administrator to see if you can take a loan against your 401K. But should you change jobs, you would have to pay back that loan immediately or the loan would become a withdrawl with penalty and taxes.
The purpose of a 401K is long term investment for your retirement. You will need those funds when you hit your 60s.
2007-10-10 06:54:26 · answer #2 · answered by bdancer222 7 · 0⤊ 0⤋
call your 401k provider, and tell them that you are looking to withdraw for a home purchase. They will not access the penalties if it's for a home purchase.
ask them for the turnaround time that you will receive the money, and how soon do you need to buy the home after you received it.
*This isnt any EARLY WITHDRAWAL PENALTIES if you're buying it for a home. Your 401k company will tell you this. I did it for my house purchase....but I dont recommend doing it.
2007-10-10 05:57:31 · answer #3 · answered by Anonymous · 0⤊ 1⤋
It would depend on how your 401K is set up. Is there a penalty for withdrawing money? If there is, to me the best way would be to borrow against it, using it as collateral.
2007-10-10 05:54:46 · answer #4 · answered by lnrosy2000 3 · 0⤊ 0⤋