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@DallasLoanGuy wrote:borrow the funds from the 401k
the payments do not figure into dti
this is the est course of action for most
+1... This is what I did. I borrowed 8.5k from my 401k to help with DP and closing costs in January 2012 of 11k on a conventional mortgage w. 5% down, 3% sellers paid closing costs, 175k sales price. The 401k loan payments did not factor into my DTI since it was secured by my own financial assets. My 401k balance is about 50k and I'm 31. I paid off the 401k loan in April with my bonus. Then I took out another loan against my 401k and paid off my husbands dodge which he bought before our marriage. The interest rate was 21% on that dodge... I would much rather pay myself 5.5% than pay Americredit 21%
@webhopper wrote:
@DallasLoanGuy wrote:borrow the funds from the 401k
the payments do not figure into dti
this is the est course of action for most
+1... This is what I did. I borrowed 8.5k from my 401k to help with DP and closing costs in January 2012 of 11k on a conventional mortgage w. 5% down, 3% sellers paid closing costs, 175k sales price. The 401k loan payments did not factor into my DTI since it was secured by my own financial assets. My 401k balance is about 50k and I'm 31. I paid off the 401k loan in April with my bonus. Then I took out another loan against my 401k and paid off my husbands dodge which he bought before our marriage. The interest rate was 21% on that dodge... I would much rather pay myself 5.5% than pay Americredit 21%
Not telling you what to do. But at your age. And having that much already in there. You should have just withdrawn that amount to pay for a house. Not borrowed it. Buying a house is one of the reasons you're allowed to withdraw money from it
@thrillege wrote:
@webhopper wrote:
@DallasLoanGuy wrote:borrow the funds from the 401k
the payments do not figure into dti
this is the est course of action for most
+1... This is what I did. I borrowed 8.5k from my 401k to help with DP and closing costs in January 2012 of 11k on a conventional mortgage w. 5% down, 3% sellers paid closing costs, 175k sales price. The 401k loan payments did not factor into my DTI since it was secured by my own financial assets. My 401k balance is about 50k and I'm 31. I paid off the 401k loan in April with my bonus. Then I took out another loan against my 401k and paid off my husbands dodge which he bought before our marriage. The interest rate was 21% on that dodge... I would much rather pay myself 5.5% than pay Americredit 21%
Not telling you what to do. But at your age. And having that much already in there. You should have just withdrawn that amount to pay for a house. Not borrowed it. Buying a house is one of the reasons you're allowed to withdraw money from it
This is terrible advice. If she didn't NEED to withdrawl it, and could afford to pay it back it isn't smart to just withdrawl. There is taxes on that amount that you immediately lose. Having 50k in 401k is great, but it takes a lot more than that to retire. Please don't solicite uneducated advice
@Anonymous wrote:
@thrillege wrote:
@webhopper wrote:
@DallasLoanGuy wrote:borrow the funds from the 401k
the payments do not figure into dti
this is the est course of action for most
+1... This is what I did. I borrowed 8.5k from my 401k to help with DP and closing costs in January 2012 of 11k on a conventional mortgage w. 5% down, 3% sellers paid closing costs, 175k sales price. The 401k loan payments did not factor into my DTI since it was secured by my own financial assets. My 401k balance is about 50k and I'm 31. I paid off the 401k loan in April with my bonus. Then I took out another loan against my 401k and paid off my husbands dodge which he bought before our marriage. The interest rate was 21% on that dodge... I would much rather pay myself 5.5% than pay Americredit 21%
Not telling you what to do. But at your age. And having that much already in there. You should have just withdrawn that amount to pay for a house. Not borrowed it. Buying a house is one of the reasons you're allowed to withdraw money from it
This is terrible advice. If she didn't NEED to withdrawl it, and could afford to pay it back it isn't smart to just withdrawl. There is taxes on that amount that you immediately lose. Having 50k in 401k is great, but it takes a lot more than that to retire. Please don't solicite uneducated advice
Actually it's not uneducated advice. It's a matter of opinion. You don't have to agree with it. So save your pathetic insults. It says a lot about you as a person. I've purchased two homes. Yes there are taxes involved when you withdraw from your plan, but if you're purchasing your first home. Knowing that a home is likely the largest purchase you will make. And considering we're only talking $8000. At 31, it's absolutely a good option.
Again, you don't have to agree with it. I'm sure if you talk to 20 Financial Advisors. You will get several opinions on this. Some may even tell you to do a combination of both. Doesn't make either opinion uneducated, right, or wrong.
For ME this year would probably be a good year to withdrawal if I decided to do that. I'm in the middleof adopting two children from CPS and I heard (but have not checked) that there is an adoption credit I could claim. So its possible this credit could offset the 401k withdrawal tax/fine. BUT the house I am "now" looking at (after I came to my senses regarding that "dream"home that popped up) - IF I WERE TO qualify for a home loan is $41,000 4 bdr 2 bath in the neighborhood I was wanting. Nice brick home at an Unbelievable price. Does need carpeting and some sheetrock work but has a new roof and good bones. Buying a home like this would be a savings in the end. I'd pay less compared to my rent and it would be money going toward my own benefit instead of a landlords.
BUT because a house note at this price range would be cheaper than my current rent - that means I could afford to take out a LOAN from my 401k and still be just fine with my monthly budget. Pay back into my 401 and help build that back up.
If I wait just a few months, I can pay down my credit cards monthly and use my bonus money & Income tax refund to purchase a home and NOT touch 401k money.
so I'll just practice patience for now. This also gives my current credit file time to age more. I'm currently in the 600s with my credit scores but do have 2 baddies that are currently 3 & 5 years old.
Thanks for the replies - it does help me feel better knowing that some do use the 401k money for the purchase of a home so I dont feel like a loser should I need to use it.