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FortWayne
2011 May 24, 11:52am
401k, you can borrow against your 401k if you are a first time buyer at a very low rate.
msilenus
2011 May 24, 4:05pm
Another option is to just take an early withdrawal and suck up that penalty. Paying 10% more tax on 2x the money beats the pants off of paying normal tax on 1x the money. Assuming you've been saving for a few years already, you might have enough to do that now.
Locking in a low interest on a fairly-priced home that you plan to die in should only prove to be a bad move if you die too soon, or get forced out of it by miscalculation or hardship. Otherwise, your earning power should grow while your housing payment stays fixed.
So it might make sense to buy sooner rather than later to guarantee a low rate. Be sure to account for property taxes, insurance, maintenance, and changes in transportation and utility costs --in addition to the payment.
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With the the prices going up and up years ago, I was one of those that was priced out of the market and have been renting. Now I am thinking I "have" to jump in to buying, since paying for rent will probably be the same monthly payment more or less than renting, and some places locally I've noticed have reached prices I last saw in 2000-2002 (comparing a property I bought and sold around that time).
So the issue now is saving for the down payment, 3.5% - 5% for fha. I'm thinking if to hold off my 401K contributions for a year to save for the down payment or not.
Let's assume a few conditions:
1.Borrower can't save for the down pmt and put $ into 401K at the same time. It's one or the other.
2.Employer matches 100% up to 5% of your contribution. THIS is the hard part, give up that matching for 12 months or not.
Obviously, not looking at the home purchase as an investment, but paying someone else's mortgage with my rent payments is not a good feeling.
Thoughts?
#housing