Is it smart to tap 401(k) to buy a house?
By Cathy Moran, California Bankruptcy Attorney on Sep 1, 2008 in Uncategorized
Soon we will hear a crescendo of voices urging people back into the home buying market. Prices have fallen; the home ownership obsession continues unabated. Should you borrow against your 401(k) for a down payment?
The collective wisdom is mixed. The South Carolina The State.com did a good job of looking at the pros and cons of borrowing from your 401(k). The most telling question it asked was whether you will be able to make both the house payment and repay the 401(k) loan.
The present collapse of the housing market, in my mind, highlights the need for retirement savings separate and apart from the equity in one’s home as the foundation of a comfortable retirement.
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