1. Using Your Retirement Funds for a Down Payment
Do you want to become a homeowner while enjoying everything that life has to offer? Well, if you are fortunate to have a 401(k) account or an IRA account, you might have the opportunity to make your dream come true.
Assuming you have a traditional IRA… You can actually withdraw up to $10,000 from your account in order to buy and even build your place to call home without ending up paying the 10 percent early-withdrawal penalty (no matter how young you are).
Married couples can benefit even more. If both of you have separate traditional IRAs, this means you can withdraw up to $20,000. However, you’ll have to pay a tax on the amount you want to withdraw.
If we refer to a Roth IRA account, you can easily withdraw contributions whenever you like for virtually any reason without paying the penalty or a tax.
A 401(k) account has its perks too. In general, you can avoid paying a tax or a penalty loan, but only if you stick to no more than $50,000. Also, if you borrow money from your 401(k), you’ll have to pay the amount with interest, of course, within five years. However, the period of time when it comes to loans for homes can be extended.
