Can You Use Your 401k to Buy Your First Home?
AuthorKelsey Heath. Date:
When buying real estate, the biggest hurdle is often saving enough money for a down payment. Many buyers start looking into alternative ways to fund a deposit. Some options include getting a gift, selling another asset, or grants for first-time homebuyers. However, many potential buyers start eyeing off an account that is seemingly forbidden—their 401K. So, can you use a 401k to buy a house? Potentially. A 401(k) is a retirement savings plan offered by many employers that has tax advantages for the saver. Employees can contribute a portion of their salary to their 401(k) on a pre-tax basis, meaning that their contributions are deducted from their gross income for the taxable year. Because many employers offer to match contributions to a certain percentage, 401(k) funds can start adding up quickly. 401(k) can be invested in various options, such as stocks, bonds, mutual funds, and other investment vehicles. The downside … Continued
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