Financing in San Anselmo>Question Details

Bob, Home Owner in San Anselmo, CA

I am refinancing my home. The appraisal is enough to cover the LTV. But the loan does not have cash out. I need 70K to pay off bills can i use my ira?

Asked by Bob, San Anselmo, CA Sat Oct 29, 2011

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Elise Groves (707) 546-0440’s answer
Bob. I am still not clear on why you would want to 'fund' a second if the intent is to pay off some bills. You would then use the proceeds of the 2nd to pay off the bills? It sounds like you would be borrowing from yourself, then paying yourself back. Why not just take money from your IRA and pay those bills.

There are a couple of people you should consult: 1) your financial advisor first to see what the terms of withdrawl are, and the penalties and taxes, if any. If you are able to use this method to pay down your debt, then you will most likely need to show that documentation to the lender on the first mortgage. They will generally have to approve of the terms for any subordinate financing.

Rules may also be different depending on your loan amount.

Let us know what happens and good luck to you!
Web Reference: http://www.GrovesTeam.net
1 vote Thank Flag Link Sat Oct 29, 2011
Someone would need more infromation to answer your question. contact me if you would like me to help you further.
0 votes Thank Flag Link Wed Nov 2, 2011
Bob
be careful here.
You are possibly talking about paying an additional 33% in taxes give or take.
I think you should consult a financial advisor who is a CPA before you do this.
This is not the optimal place to get advice for finance ideas.

Harold Sharpe - Broker
So Cal Homes Realty
(951) 821-8211
harold@socalhomesrealty.com
http://www.socalhomesrealty.com
California Department of Real Estate Broker License # 01312992
0 votes Thank Flag Link Sat Oct 29, 2011
Hi Bob,

Here is a company which lends you money for your Securities. I am not recommending this company, nor this type of solution.

Please do all the due diligence and talk to them at your own risk. Google and you may find other similar companies.

http://www.securities-lending.org/

Jacob Varghese
DRE 01790347
NMLS 327086
0 votes Thank Flag Link Sat Oct 29, 2011
I want to clarify my question. I want to use my IRA to fund a second on this house. I was unemployed for almost 2 years (empolyed now for 10 months) and ran up some bills. I am having trouble keeping up with the payments. I was approved for a second then they said i had to refi my firs before they would fund. So I am in the process of the refi. I am concerned about my debt ratios. The second can't fund until the 1st is in place. It makes me think of a chicken and egg. I know you can use a self directed IRA to buy real estate and that there is a hardship exemption (which I do not understand). I think there some option out there like a swing loan but I am not sure what is the best course of action and what to see if funding using my IRA was possible (without penalty -- I am 58 )
0 votes Thank Flag Link Sat Oct 29, 2011
You can use your IRA for pretty much anything, but be aware there are penalties for taking an early distribution from an IRA as well as income tax one must normally pay on the distribution. As far as if mortgage lenders permit it in connection with qualifying for a mortgage - yes that is perfectly acceptable to use retirement assets for that purpose.
0 votes Thank Flag Link Sat Oct 29, 2011
The IRA and Real Estate are two different kinds of Assets, unless of course you bought the house in a IRA account.

IRA rules are different and so please consult your Financial Planner/Tax consultant to get the best picture.

Jacob Varghese
DRE 01790347
NMLS 327086
0 votes Thank Flag Link Sat Oct 29, 2011
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