401k down payment or keep saving?

It depends on your employers 401k Rules. Yes, the government created laws which allows for a withdrawal to purchase your first home. But your 401k plan does not need to offer this as a service. There are also 2 ways of taking the money out: 1) As mentioned before, you can take out the money and repay it into the plan over time (ask you plan manager about what that length of time is) 2) You can take it out and not repay it. Using a 401k has advantages, such as that you are more easily approved for a mortgage, as you are not touching (or solely relying on) your regular savings or investments for your downpayment. Keeping extra money in these accounts lets the bank know you have money in reserve to pay for unexpected expenses such as repairs to the house, or mortgage payment if you should lose your job and not have a source of income for any period of time. But beware of some of the pitfalls. If your plan requires you to repay your loan to the plan, and you decide to move to another company or get fired, you are responsible for coming up with the entire lump sum of what you borrowed within a short period of time (depending on the plan this can be as short as 1-3 months). So if your job isn't 100% stable or if you think you may want to leave anytime soon, going with the 401k is not an option. Taking money out and not repaying it is not a good thing either.... for some people (myself included) that is their main source of income for retirement. The more money you put in at the begining of the plan, the more time it has to collect interest and grow into a larger sum. Taking out say $50,000 will cost you hundreds of thousands of dollars in lost money 30 years from now. Although I have a Roth IRA, that won't be enough for retirement. I am thinking about purchasing my first house in 1-2 years, and my 401k will be used. But I will try to do everything in my power not to deplete it just to afford the house. Please call me @ 214-727-9281 to discussJeff DobbsSupreme Lending

Also, it depends on your age... THAT is factor on 401k withdrawals.. email at lwintersteen@mprousa.coim I might have a alternative solution for you linda

Depending on the price of the house you may have some other options and your 8K might be enough for a down payment. I would contact a local loan officer, get pre-approved and have them give you options to see if it can work for you without having to touch your 401K. Best wishes, Sean

Hello KC, grew up there my self (class of 75...). The advantage to buying sooner rather than later is interest rates are likely to be higher the longer you wait. Also, as someone else said, depending on the type of loan you are getting and the price of the property, $8000 might be enough for the downpayment. 3.5% required for a FHA loan while a conventional loan you will need 5% of the purchase price. A loan from your 401k is a great option for some people, you are effectively borrowing from yourself but you'd want to make sure you could pay it back. Gift funds are also allowed for most types of loans. pdumouchel@primelending.com or 843-619-6025

Generally speaking, most 401k programs allow you to withdrawn funds to buy a home without penalty. Other allow you to borrow your own money from your 401k. Check with your provider for exact details. As for doing it, taking a few thousand to buy a home seems to me to be a good use of the money - especially if there is a lot, and you have many years to go before retirement. www.Minneapolis-Mortgage.net

Although you can use/borrow against your 401K, there are lending programs out there that will allow you to purchase a home with less money down.. FHA only requires 3.5% down, and you can get conventional financing with just 5% down.. both loan products have mortgage insurance, but with conventional, after 2 years, you can ask your lender to remove the MI from your payment, and so long as you have 20% equity or more, it will be removed... the best advice I can give you is to contact a LOCAL mortgage broker and apply with them. Once they look at you complete profile, he should be able to guide you to the right loan product for your situation. But I caution you.. Do not use the local "Big" bank, or one of those 50 states internet lenders or nationwide lenders...By applying with your LOCAL Broker, you have an advantage because he's familiar with local customs and works with numerous lenders, seeking out the best loan terms for your particular scenario. Because he has lower overhead, he can offer you lower rates and lower 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