Prospective homeowners can scrimp and save for months and even years to accumulate a down payment, but in a fluctuating market, there is a possibility that those savings could be quickly eaten by that down payment with nothing left for closing fees. Or worse, the changing market could continue to increase home values, leaving dedicated savers forever chasing a down payment they’re always just short of reaching. For these potential homeowners, borrowing from their 401K may be the perfect solution to covering a down payment, closing costs, and any other variables, but before you borrow from your 401K, consider these three tips:
-Often, during the period your 401(k) loan is outstanding, a person can be prevented from making full contributions to their existing retirement plan.
-If in the occasion that you borrow against your 401(k) and then leave the company you work for, you will have just 60 days to repay the entire remaining balance of your 401(k) loan. This stands even if you are laid off.
-There are many homeownership programs available to US citizens that do not necessitate the large down payment that borrowing from a 401K assumes, so be sure to explore all your options before borrowing from a 401K.
Stonebridge Mortgage Group can help you with your Reverse Mortgage, Real Estate Loan, and many other mortgage solutions. We serve the greater Portland area and are located in Gresham, Oregon. Call us today at 503.661.5580