Waterman480

It would depend on your financing and the type of 401K. If you are using FHA financing, you will not need to do this. If you use conventional financing you will. However, here is the caveat. If you are borrowing from your employer's 401K - go ahead, but make sure you have the discipline to return it. If you are borrowing from a rollover 401K, you only have 60 days to pay it back without penalty/taxes. You will not get your refund in time.

On the other hand, there is a $10,000 exemption for for 401K withdrawals for first time home buyers, and if you then put it back, you are contributing the money to your rollover 401K subject to annual limits - so therefore there is no penalty, and the federal taxes are almost a wash depending on your income and age - and this is the simple answer. So talk to your accountant for all the ins and outs of YOUR situation. - Mon Aug 24 2009, 09:03

> Houses should about double in price every 10 years

That is way optimistic. While it may be true for a brief period for areas showing constrained housing due to growth - it won't happen in most parts of Florida. When house price growth gets too far ahead of income growth, as it did in Florida and elsewhere (combined with over building and too many speculators), it will take many years to rebalance. It will probably take at least ten years just to get back to 2005/6 prices (and more for most condos) - Sun Jul 5 2009, 04:38

Update - I finally did buy after renting for awhile. By doing so, I was able to find the right property at the right price and saved $100,000 over what it would have been 3 years ago, and $50,000 over what it would have been last year. However, I intend to stay in it for a long time, and I am satisfied with the price I paid. If I tried to resell it tomorrow, it would probably still be a loser. The market shakeout is not over yet. - Sun Jul 5 2009, 04:26

Much would depend on how long you are likely to stay in your new place. Less than five years - forget about it, unless you find something at a real bargain basement price. Interest rate resets on existing mortgages, job losses, and a very large shadow "for sale" market, as well as new construction still finishing will continue to add to price pressure.

More on the shadow market - there are many, many places that are theoretically for sale, but not listed. The owners are waiting for better times, which will not be any time soon. The only question is - how long can they hold out before being forced to sell?

While the stimulus credit and low mortgage rates are appealing, they are only worth obtaining if you plan on being in place for the long term - say ten years.

Just remember, the real estate pros tried to sell you property all the way up, and all the way down. Even Warren Buffet admitted he bought too early and suffered significant losses. This recession has far to go, and when it stops going down, prices are apt to rise very slowly for the first few years, thus preventing you from recovering your acquisition and sale costs. - Sun Mar 1 2009, 09:30