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401 k home loan
Old 10-17-2007, 12:32 PM   #1
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401 k home loan

I know that when you buy your first home you can you use 401 ira towards the down payment of your first home.With my existing home can i use 401k money towards paying an existing home loan without being penalized or the whats the lowest penalty??
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Old 10-17-2007, 01:00 PM   #2
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You should call your plan administrator. I think many plans would allow a loan for financial hardship reasons etc...
Taking a loan like this is really a bad idea and if you separate from your employer for any reasons you have to repay the full amount outstanding on the loan.
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Old 10-17-2007, 01:32 PM   #3
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RED ALERT! Taking a loan from your 401(k) is generally not a good idea. Besides the fact that you have to repay the loan in full usually within 60 days if you leave the job, you may be seriously limiting your retirement finances.

Suggest you visit the 401khelpcenter for more information. Here's a link: - 401k Plan Loans and Withdrawals
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Old 10-17-2007, 06:13 PM   #4
Confused about dryer sheets
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See i don't want to take out a loan,When i originally got this house i had a loan on it and i would just like to pay it off out of my 401 money.
Thanks for the help
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Old 10-17-2007, 06:35 PM   #5
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If you want to cash in your 401k you will pay income tax on the money and pay a 10% penalty (unless you are over 59.5, yada yada)

If you take out a loan you can avoid the penalty but you have to pay the loan back.

It is hard to conceive of a reason good enough to cash in your 401k.

No more lawyer stuff, no more political stuff, so no more CYA

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