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Im considering a 401k withdrawal for my mortgage

is this a good idea? im a first time homebuyer by charliejohnson98642 from Troy, Idaho. May 14th 2015 Reply


Linda Miller (Linda Miller)
#2 ranked lender in Utah - 562 contributions

It depends. Check out your 401K plan and make sure it allows for withdrawal to purchase a new home. There can be tax penalties to withdrawal so you want to ask your 401K administrator the specific guidelines and withdrawal requirements for your 401K. Another option with a 401K is to take out a loan. Again each 401K plan has different requirements so ask your HR or plan administrator. Right now interest rates are still at historic lows but expert consensus is that we have hit the bottom and as the economy improves rates will go up. Same with home prices. Some areas are starting to see home prices moving up. It can make sense to take funds out of your 401K to buy a house before rates and home prices go up. You will get the tax benefits and start growing equity in a home. The appreciation in value in the home will probably be more than you are earning in your 401K. If you have any questions, feel free to call me. Linda Miller - 801.550.1222 or email at linda@lindamillergroup.com.

May 14th 2015
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Victor Emmel (victoremmel)
#92 ranked lender in Utah - 20 contributions

You would want to consider the overall impact of any penalties of withdrawing from your 401K and the advantage of homeownership which includes asset appreciation and potential tax benefits. As a mortgage planner, I can help you evaluate these things in the context of your overall financial goals. Feel free to contact me (Victor Emmel, PrimeLending) at vemmel@primelending.com or 801-819-5901.

May 14th 2015
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Mark Rodeghiero (markr@3rates.com)
#33 ranked lender in Idaho - 14 contributions

I would believe considering a low or "no" money option may be a great consideration. You may be able to get into a home for as little as zero to 0.5% (thats 1k on a 200k home). I would explore this option all day long as a first time homebuyer. As a first time home buyer you may also be able to benefit from Idaho's Mortgage Credit Certificate (tax credit) and should definitely be explored. - Mark Rodeghiero - Broker/Owner Source Mortgage 208-473-2925.Best Regards

May 14th 2015
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William J Acres (William_Acres)
#2 ranked lender in Arizona - 7,927 contributions

If you cannot purchase a home because you don't have enough for the down payment, then it's probably not a bad idea.. a single family home, in a healthy market can appreciate as much as 4% to 8% per year.. If you purchase a home for $100K, but only put down $5000, and your homes value increases between $4000 to $8000 per year against a $5000 original investment.. that's 80% to 160% return.. There is no 401K on the planet that has those types of returns.. The best advice I can give you is to contact a LOCAL mortgage broker and apply with them. Once they see your complete loan profile, they will be better equipped to advise you properly. Also, by applying with your LOCAL Broker, you have an advantage because he's familiar with local customs and works with many lenders with each one offering a different type of lending program. This is unlike the local bank which typically only has a few lending programs. The more lenders, the more lending options, and the more likely your scenario will be accepted.. Plus, the broker is experienced in seeking out the best loan terms for your particular scenario, and he has lower overhead which typically results in lower rates and fees than most of the larger lenders.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com

May 15th 2015
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Phil Dumouchel (PhilDu)
#32 ranked lender in South Carolina - 2,225 contributions

I normally strongly recommend a 401k loan rather than a withdrawal, talk to a financial adviser about the difference.

May 15th 2015
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