Sunday, March 14, 2010

Can money from a 401k loan for a first time home go towards a down payment AND closing costs?

I know I can use a loan from my 401k towards the down payment. If I have some money left over from the 401k after that, can I use the rest for the closing costs?

Can money from a 401k loan for a first time home go towards a down payment AND closing costs?
yes!!!
Reply:If you took the money as a LOAN from your 401(k), you can use it ANY way you wish. If you WITHDREW the money from your 401(k), you WILL pay FEDERAL income tax on the FULL amount. I don't know if there is an exception from the 10% early withdraw penalty for home purchases.
Reply:That is one of the legit reasons 401k can be touched. Yes you can use any monies remaining for closing cost. The check should come in your name anyway.


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