Re: Can I use my 401k to help me purchase my dream home?[ Edited ]
10-02-2012 06:54 AM - edited 10-02-2012 06:56 AM
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.