We want to take advantage of the low rates and good realestate prices but we’re a bit short on a 20% downpayment. I’ve read that you can withdraw Roth IRA up to ,000 for a first time buyer to put down towards the purchase of a home. However, it says that the IRA had to be open for 5 years. If it has been open for less, what are the penalties? Is it better to take a loan out on the 401k instead?
NVmelinNY… Thanks but what is the difference 401k vs Roth? They’re both retirement accounts. Also, I found this: http://www.fool.com/money/allaboutiras/allaboutiras12.htm Which says that it needs to be open for 5 years even if it’s for a house.
Rebecca, Thanks but I’m only 27 and would like to have 20% downpayment.
mar c, exactly! I’m planning on buying a 2 family which will be rented out eventually.
Anyone else? Really trying to get clarificaiton on the 5 year rule on the Roth. Any experts??
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Honestly the answer is one you do not want to hear but if you have to borrow from your future you are not ready to buy. How much do you have down becasue FHA is only 3.5% down.