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re: 401K vs Buying Home
Posted on 8/8/14 at 7:47 pm to LSUisBetterthanU
Posted on 8/8/14 at 7:47 pm to LSUisBetterthanU
quote:
I have 13K in my 401K and I want to buy a house. I am thinking about pulling the money from my 401K for the down payment.
Generally speaking that is not a good idea, although with only 13K involved the interest and penalties won't hurt that much.
And if you have the cash already, why bother?
It sounds like the real problem here is that your income/savings are just not enough to deal with a long-term mortgage. If that's the case, buying is pretty risky.
1
Posted on 8/8/14 at 8:04 pm to foshizzle
It's not really a bad move if you're taking the money out as a loan, you'll pay it back with interest - but only 13k shouldn't be much of a payment. You typically can only take out 50% of your funds.
You don't have to pay taxes if it's a loan - it's way better than a withdrawal, which I would consider a bad idea. I've taken out a loan from my 401k before and would do it again if I absolutely needed to. I usually select the longest loan term and then pay it back as soon as I have the funds available.
You don't have to pay taxes if it's a loan - it's way better than a withdrawal, which I would consider a bad idea. I've taken out a loan from my 401k before and would do it again if I absolutely needed to. I usually select the longest loan term and then pay it back as soon as I have the funds available.
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