401K Down Payment for First Time Buyers
As a first time homebuyer, it is very challenging to come up with the cash flow for a down payment in addition to closing costs and furnishing your new home. Saving is very time consuming, so many home buyers have turned to using their 401K retirement savings as a means of funding. As it is your money, you may borrow or withdrawal from your account. However, it is essential you learn the details to avoid extensive taxes or penalties.
Homebuyers are allowed to borrow from themselves specifically for a down payment. The rules applied will require repayment within 10 years, unlike the typical 5 year requirement. The loan will incur interest payments over the 10 years as well.