Can money from a 401k loan for a first time home go towards a down payment AND closing costs?

Question

I know I can use a loan from my 401k towards the down payment. If I have some money left over from the 401k after that, can I use the rest for the closing costs?

Answer 1

yes!!!

Answer 2

as previous poster stated that 10k penalty exemption applies purely to IRA's and not in any respect 401k's. yet, you are able to take a worry for the domicile purchase and use it for each of the excuses you stated. something quickly linked with the acquisition....in reality if it truly is listed on the hud fact then you are able to take it. keep in mind that you are able to also upload the taxes and 10% penalty and take that out too. So hud+10% penalty+taxes and then have them withhold 30% for federal earnings tax. in case you want 10k have them take $14,500 and withhold $4,500. That way there heavily isn't a suprise come tax time. And no you do not ought to do a private loan to optimal quantity first. you basically ought to assert that the non-public loan itself will create a worry. If it truly isn't any longer the case (mortgage would not present a worry) then all you should do is take out the optimal type of loans allowed by your plan contained in the minimum quantity. ex: in case you want that 10k and your plan helps 2 loans and the minimum is 1k then take 2 seperate 1k loans and performance them paid decrease back over the shortest time you are able to have the funds for. basically keep on with for the loans first then keep on with for the worry.

Answer 3

That is one of the legit reasons 401k can be touched. Yes you can use any monies remaining for closing cost. The check should come in your name anyway.

Answer 4

If you took the money as a LOAN from your 401(k), you can use it ANY way you wish. If you WITHDREW the money from your 401(k), you WILL pay FEDERAL income tax on the FULL amount. I don't know if there is an exception from the 10% early withdraw penalty for home purchases.