Should I Use My 401k To Buy A Home

Should I Use My 401k To Buy A Home

Image title

Buying a home can be a financial stretch. With soaring home values and
rising interest rates, many potential first time home buyers find saving for a
down payment increasingly difficult.

For many people, the main source of
savings is in the form of a 401k and tapping into this resource for a home
purchase is one way to find the down payment necessary to finance a new
home; but should you use your 401k to buy a home? Experts are

A 401k is a retirement savings plan offered by employers which takes
pre-tax earnings and deposits it into an investment account for use in
retirement. The money in a 401k account can be accessed by either taking
out a loan against the balance or by a straight withdrawal. A withdrawal
before the age of 59.5 is also subject to a 10% penalty.

Taking out a loan from a 401k account may be a viable option for potential
home buyers. For one thing, a loan from your 401k should not count
against your borrowing power. You also don’t need to qualify because you
are borrowing from yourself. The amount you can borrow is limited, for
example 50% of the balance, and typically must be repaid within 5 years.
The other option is a simple withdrawal; the 10% penalty is incurred, but
the value is not usually limited.

Saving for a down payment can be challenging. Using your 401k to help
may be a great option. Speak with your financial advisor and see if this is
the right financial move for you.

Stacey Hawkins Headshot
Phone: 954-999-8282
Dated: May 27th 2022
Views: 66
About Stacey: ...

Property Search

RSS Feed

View our latest blog posts in your RSS reader. Click here to access. RSS

Search Blog

Recent Blogs

How Rising Rates Affect Housing Market - The rising mortgage rates might
Things To Avoid After Applying For A Home Loan - By Stacey Hawkins | Plum Tree
Co Ownership Is A Growing Trend - Co-Ownership, known as fractional

Saved Properties

This is a list of your favorite properties. We will email you if a property is reduced or leaves the market.

Click 'Save' to add a property to this list.

Register / Login

New & returning visitors please enter your information to login.

By clicking 'register' you are agreeing to our terms of use & giving us expressed written consent to contact you.

Questions? Comments? Complaints?

This message will go directly to the head of our team.

Location & Address

Jennifer Gonzalez
9078 Union Centre Blvd #350
West Chester Township, OH

Other Locations