using your 401k for a downpayment on a house

To be sure, cash-poor workers who borrow to the max to buy a house can get into trouble quickly. ironically, the best time to borrow against your 401(k) to pay closing costs or cover a down payment.

Can I use a 401k loan for a down payment with an FHA loan? Asked by marysimpler, Warren, MI Tue Apr 23, 2013. selling a property and should make $3,000 after selling fees. Want to buy a house listed at $189,000 through FHA.

There are narrow exceptions to this penalty, but I doubt they would apply for your reason of a down payment on a new home. Some 401(k) plans do allow you to borrow from your existing account – you will need to check with the plan administrator to discuss their specific rules regarding borrowing, repayment, etc.

Using Your 401k for a Down Payment There’s no specific penalty exemption for home purchases when you pull money out of a 401k, so any money you take out will be classified as a "hardship exemption." You’ll be assessed a penalty of 10% on the amount withdrawn and you’ll have to pay income tax on it as well.

You may be able to tap into your 401(k) plan assets during a financial emergency .. if you're using the money to buy a primary residence-the home where you'll be. down payment or repairs on a primary home;; college tuition and related.

You will almost never be able to use a personal loan for a down payment on a house. Shawn Proper, senior vice president of mortgage and consumer lending at Mars Bank, explains why. "One of the things we are required to do as a part of the underwriting process is verify outstanding debt and credit inquiries from the past three, six or 12 months," Proper says.

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You can withdraw money from your Roth IRA to help pay for a house.. using a Roth IRA is that you've already paid income tax on your contributions.. until you' ve saved the down payment-while leaving your retirement savings. Roth IRA Rules · Roth IRA Contribution Limits · Roth IRA Limits · How to Do a 401(k)-to-IRA .

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Borrowing money from your 401(k) to fund the down payment of a. pay taxes on your salary and are using your pay check to repay the loan.