Gene

I am in my 70s now and bought my first home more than 50years ago. I now buy and sell homes (and apartments) without retaining an agent. However, I can't stress how important it is for first time (and second time) home buyers to utilize an agent. The buyer's agent generally represents you, the buyer, and works on your behalf...and not the seller's. That's why my suggestion is to retain a buyer's agent (and don't use the seller's agent) who will work with you. Take the time to find an agent who you can learn from. Learn about inspections, financing, paperwork, closing, etc. In time, you'll learn that there is nothing mystical about agents...you'll also learn there are good agents...as well as bad agents. But this will be the most important and costly purchase you'll make so far in your life and you need someone to protect your interests. Please find a buyer's agent...and again, remember that there are good and bad agents out there so please be careful and thorough in your agent search. - Thu Mar 8, 2012

Hi D.W. I answered a similar question several weeks ago and am copying my response as I think it applies in your case. I hope it helps.


Hi Ulrike: Most (but not all) 401K plans allow the plan holder to "borrow" assets from the plan to use as downpayment for a house. It is important to note that you are "borrowing" the money which means you'll have as long as 15 years to pay the loan back to your 401K. You are not "withdrawing" the money as that would constitute a taxable event which requires the plan holder to pay the federal income tax on the withdrawn amount and a penalty depending on your age at the time of withdrawal. There are, of course, significant other considerations involved with borrowing from your 401K but the short answer to your question is Yes you can borrow from your 401K...if your plan allows you to do so. As others have said, consult an attorney or financial specialist, though, before doing so. Answers on Trulia (including mine) are only personal opinions and should be understood as such.

Saying that, I want to suggest that your question should focus on SHOULD you borrow from your 401K to buy a house. The answer to this question is not as clear. There are even more considerations inovlved before answering this. If you are asking this question, it usually means you have no other assets to use as a downpayment so it's either your 401K or no house (unless you can find a program with zero down). As a former registered Investment Advisor, NYSE committee member, and financial planner with 40 years experience, my advice, based on the current economic climate and uncertainty is an unequivocal NO. Your 401K is your financial lifeline when you have no other assets to fall back on. If employment security was higher, if falling real estate prices were to stabilize, if our economy was to strengthen, then I might answer otherwise. But the current risks are too high to suggest or advise raiding your 401K for all but the most crucial and necessary expenses. Whatever you decide, Good Luck and God Bless. - Tue Jul 26 2011, 14:01 .. - Mon Aug 29, 2011

Hi Ulrike: Most (but not all) 401K plans allow the plan holder to "borrow" assets from the plan to use as downpayment for a house. It is important to note that you are "borrowing" the money which means you'll have as long as 15 years to pay the loan back to your 401K. You are not "withdrawing" the money as that would constitute a taxable event which requires the plan holder to pay the federal income tax on the withdrawn amount and a penalty depending on your age at the time of withdrawal. There are, of course, significant other considerations involved with borrowing from your 401K but the short answer to your question is Yes you can borrow from your 401K...if your plan allows you to do so. As others have said, consult an attorney or financial specialist, though, before doing so. Answers on Trulia (including mine) are only personal opinions and should be understood as such.

Saying that, I want to suggest that your question should focus on SHOULD you borrow from your 401K to buy a house. The answer to this question is not as clear. There are even more considerations inovlved before answering this. If you are asking this question, it usually means you have no other assets to use as a downpayment so it's either your 401K or no house (unless you can find a program with zero down). As a former registered Investment Advisor, NYSE committee member, and financial planner with 40 years experience, my advice, based on the current economic climate and uncertainty is an unequivocal NO. Your 401K is your financial lifeline when you have no other assets to fall back on. If employment security was higher, if falling real estate prices were to stabilize, if our economy was to strengthen, then I might answer otherwise. But the current risks are too high to suggest or advise raiding your 401K for all but the most crucial and necessary expenses. Whatever you decide, Good Luck and God Bless. - Tue Jul 26, 2011