Recently relocated, home selling slow in old location, need to close on new home by January. Only available capital is IRA for new home down payment.
2007-11-20 09:42:47 · 7 answers · asked by James B 1 in Business & Finance ➔ Renting & Real Estate
Absolutely not. You will lose at least a third of that money to taxes and fees.
Find different financing that will allow for a lower downpayment.
2007-11-20 10:02:25 · answer #1 · answered by godged 7 · 0⤊ 0⤋
I don't advise taking money from an IRA. Especially not a tradtional IRA. If it is a Roth IRA that is different, but still not advisable. Can you rent in your new location rather than buying a house right away? Or get a bridge loan until the old house sells?
2007-11-20 09:51:35 · answer #2 · answered by HEATHER 6 · 1⤊ 0⤋
Sure. If you absolutely need a house by January then it sounds fine to me. Generally, if you take out your IRA money out early, you will pay an extra 10% tax on your withdrawal. But since you are using it to buy a house, you can use up to $10,000 of your retirement money and not have to pay the penalty tax.
Go for it!
This only works though if you have not owned a home in the past 2 years.
2007-11-20 09:47:51 · answer #3 · answered by Dom 5 · 0⤊ 0⤋
That is a very good idea. Most IRA's will allow you to use money from your IRA to use as a down payment without a penalty.
You should check with your account manager.
When you purchase a house your points and fees are normally tax deductible over the life of the loan. Of course your taxes are deductible as is your interest you pay on your mortgage.
You should check with your tax consultant for deductible items on your income tax.
But in answer to your question that is a very good way to make the down payment on your new home if your account allows it.
I hope this has been of some use to you, good luck.
"FIGHT ON"
2007-11-20 10:12:44 · answer #4 · answered by loanmasterone 7 · 2⤊ 1⤋
that's unlawful to BORROW against an IRA you are able to take the money out and pay all the taxes and effects. The withdrawl isn't unlawful. you are able to take money out a ROTH on your first time domicile purchase with out the ten% penalty. and you will no longer pay taxes - because of the fact the account grew to become into no longer tax-deductible. in case you have a ROTH - do no longer basically take the money out. tell your broking provider - you would be wanting a particular tax type on your purchase of your first domicile - to circumvent that 10% penalty. with a bit of luck you're no longer speaking some 401K /
2016-11-12 05:57:28 · answer #5 · answered by Anonymous · 0⤊ 0⤋
James B,
simple NO! u'll lose up to 40% of IRA.
u need to RENT untill u sell the old house or lose both of them.
visit daveramsey.com to learn ur hard lessons from others mistakes.
can u afford two house payments on one pay check?
2007-11-20 09:51:47 · answer #6 · answered by Anonymous · 0⤊ 1⤋
Not enough information....Is it a traditional IRA or a Roth IRA?
2007-11-20 09:45:37 · answer #7 · answered by Dug48 4 · 0⤊ 0⤋