401k First time home buyers (condo, broker, borrow, loan)

[spotlight114]

Our broker told us that we could take up to 10k from our 401k if we are a first time home buyer. We are looking further into this..can anyone tell me if the max is actually 10k and is there a penalty?

[Donn2390]

I'm not sure what the Max is, if there is a max. I doubt if there is a max, since it's your money. I do know my daughter borrowed $20,000 from her 401 K when she purchased her condo. it's a good deal. The interest you pay on the loan goes back into your account, since it's your money.
She paid pack the loan over four years, by just continuing to contribute. The down side is, if you quit, get laid off, or change jobs for any reason, you must immediately pay back the loan, which might be difficult.
If you know for sure you will be with the company in five years, it's a great way to go...............

[spotlight114]

Originally Posted by Donn2390

I'm not sure what the Max is, if there is a max. I doubt if there is a max, since it's your money. I do know my daughter borrowed $20,000 from her 401 K when she purchased her condo. it's a good deal. The interest you pay on the loan goes back into your account, since it's your money.
She paid pack the loan over four years, by just continuing to contribute. The down side is, if you quit, get laid off, or change jobs for any reason, you must immediately pay back the loan, which might be difficult.
If you know for sure you will be with the company in five years, it's a great way to go...............

we were gonna take it from my husbands 401k from his old job (he never combined it with the 401k for his new job)...we have no idea how this all works

[Rakin]

I would consult an accountant but my gut reaction is don't do it if possible.

You may need to roll it over to a new 401 plan and then borrow.

You might temporarily stop your contribution & start a savings account for a home and get out of debt.

[middle-aged mom]

Assuming you are talking about a withdrawal as opposed to a loan, the IRS allows you to withdraw up to $10,000, penalty-free when funds are used for a qualified home purchase. You still have to pay taxes on it. Your HR Department and/or 401K Plan Administrator should be able to advise you, further relative to their plan rules and your vesting provisions.

[spotlight114]

Originally Posted by middle-aged mom

Assuming you are talking about a withdrawal as opposed to a loan, the IRS allows you to withdraw up to $10,000, penalty-free when funds are used for a qualified home purchase. You still have to pay taxes on it. Your HR Department and/or 401K Plan Administrator should be able to advise you, further relative to their plan rules and your vesting provisions.

this sounds more like what our broker was telling us...sounds like we may have to roll the 401k into an Ira and then take it out...i really have no clue and my husband is going to talk to his accountant this week..thanks