Home Buying in Bronxville>Question Details

Dee, Home Buyer in bronxville p.o.

28 sf interested in buying a co-op in Bronxville P.O. Should i withdraw the money i have saved in my 403b or?

Asked by Dee, bronxville p.o. Tue Jan 1, 2008

borrow against it?

Help the community by answering this question:


Do not take the money out of your 403(b) account to purchase this co-op. IF your not 59 1/2 , you'll face a 10% early withdrawal penalty, plus the money you withdraw is taxed as ordinary income. If you do a loan, it's like being taxed twice on the money.

Think about it:
1. Your being taxed on the money you withdraw
2. You pay back the loan with after tax dollars
3. When you retire, your taxed again on the money when you take it out

a 403 account is a retirement account. Do not touch it!
0 votes Thank Flag Link Sat Jan 12, 2008
Buying a coop in the Bronxville PO is a very good investment. I asked about your money to put down , not using your 401 K as your deposit. That is not a good idea. to the last response. Not many area in the United States can say the price of a unit went up from 2006 to 2007. Bronxville PO can. Dee if you have the money to put down, and your ar comfortable with the payments. I would think owning would be better than renting..
0 votes Thank Flag Link Wed Jan 2, 2008
Generally you can take a loan against your 401k/403b but its not a great idea. You pay the interest to yourself but you cannot switch jobs and if you end up late on payments, you can get penalized for early withdrawal which is very punishing. Plus real estate is generally a poor investment (although the media hyping the american dream tends to tell you otherwise). The market will return about 9% annually while housing prices grow at about the rate of inflation around 3%. Plus Bronxville PO means Yonkers and Yonkers schools which are bad so the appreciation of the property is likely to be even lower. People will rent you a house, and you can save now for a downpayment but no one will give you a loan to retire. You should leave your retirement savings alone.
0 votes Thank Flag Link Wed Jan 2, 2008

Most, if not all qualified savings plans have penalties for early withdrawal. As was already mentioned, you should check with the administrator of your plan for details. Down payment and reserve requirements are becoming more of an issue lately as many lenders are reacting to the volatile market conditions we have right now. Definitely check into your financing options as soon as possible so that you know what to expect prior to making any offers. Feel free to contact me for a full evaluation. My cell is 845-544-3001.
Web Reference: http://www.guardhill.com
0 votes Thank Flag Link Tue Jan 1, 2008
Dee, I think I need to know more information about you savings and what building you are looking at. MaAny buildings are 20% down. They also want you to have money in savings. Your 403b may be what you use as your savings to show stabilty. If you want to talk directly ,please feel free to call me or email..
914 804 1126 or pbreen@houlihanlawrence.com
0 votes Thank Flag Link Tue Jan 1, 2008
My wife and I used our 401Ks to purchase my first home and I don't think would have been able to purchase without these monies. Back in 1997 I was allowed to take a loan for up 50% of account balance. Check with your plan coordinator to see what are your restrictions or limits.

Also, another advantage is that you are paying yourself back the interest on the loan. Can't beat it.
0 votes Thank Flag Link Tue Jan 1, 2008
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