How To Guide For: A Look At Whether You Can Borrow From Your 401(k) To Buy A Home For The First Time

Yes you can take money out of your 401(k) to buy your first home. You can take earnings from your Roth IRA of up to $10,000 for the purchase of your first home and no income tax is due. If you do not have a Roth IRA and you have a traditional IRA as a first-time home buyer, you can take a $10,000 distribution without having to pay the 10% tax penalty. If you need to take out more than $10,000 a 10% penalty would be applied to the additional distribution amount and it will also be added to your income taxes. Yikes that sounds like a lot. So if you have money saved up in a savings account that should be your first choice and is probably the best option if you want to avoid paying hefty taxes and avoid depleting your 401(k). To learn more about whether you can borrow from your 401(k) to buy a home and how -- click the pictures below to read the articles.