Using Your 401k to Buy a Home in Florida, advice from Savvy Phil Ganz & Ryan Skerritt , by Rachel Ganz
Florida is the best place to own a home because it’s always sunny and you don’t pay all those taxes as you do in Southern California!
Meghan Markle and Prince are selling their
$21 million Montecito mansion to buy a more economical mansion in South Florida!
If South Florida is good enough for them. It’s good enough for you.
Are you thinking about using your 401K savings to buy a house, but not sure if it’s a good idea?
Are you worried about the extra charges and taxes, how much you can borrow , and if it will lower your paycheck or mess up your retirement savings?
Also, will this affect getting a home loan?
Are you confused about all this.
Contact Phil Ganz for savvy advice
Check out this profile on Campsite.bio!
When you pull money directly from your 401k before reaching the age of 59½, you’re generally hit with a 10% early withdrawal penalty on the amount you take out. Plus, you’ll need to pay income taxes on that withdrawal, as it counts as income for the year you take it out.
These two factors combined can significantly reduce the amount you have available for your home purchase.
However, if you’re looking at taking a loan from your 401k instead, the scenario changes. Loans don’t incur the same penalties and immediate tax hits as withdrawals do. It’s like borrowing money from yourself, with the intent to pay it back into your retirement account over time.Considering a 401k loan to finance your home purchase involves understanding specific limitations and terms.
The interest on the loan is paid back into your 401k, which can be somewhat beneficial since you’re paying interest to yourself.
The good news here is that borrowing from your 401k to finance your home purchase generally doesn’t directly affect your ability to get a mortgage.
A 401k loan is unique because it doesn’t appear on your credit report as conventional debt would, since you’re essentially borrowing from yourself.
A few advantages are :
No Credit Check Required: Borrowing from your 401k doesn’t involve credit checks, so it won’t affect your credit score.
Quick Access to Funds: This can be a relatively fast way to access funds for a down payment or closing costs without waiting for loan approvals from external lenders.
The Cons
Before deciding, check your 401k’s rules on loans and talk to MakeFloridaYourHome to see how this fits with your money goals.
This advice is based on experience with Phil Ganz and Team closing over One billion dollars and helping countless families.
Phil Ganz has over 20+ years of experience in the residential financing space. With over a billion dollars of funded loans, Phil helps homebuyers configure the perfect mortgage plan. Whether it’s your first home, a complex multiple-property purchase, or anything in between, Phil has the experience to help you achieve your goals.
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Check out this profile on Campsite.bio!
Buying a beautiful home in South Florida is a great way to enjoy the sun the fun, the beach, the boating and a lot less expensive than Southern California
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