Can I borrow against my 401K program to get a down payment?
August 31st, 2008 By Peter G. Miller
With many 401K programs — but not all — up to 50 percent of the account balance, but no more than $50,000, can be borrowed. Money borrowed must be repaid. If not repaid, there can be substantial tax consequences.
For details regarding your right to borrow 401K money, speak with your retirement account manager BEFORE entering the real estate marketplace. Ask how much you can borrow, the loan term, interest rate, and what happens if you default. Also, before entering the home buying marketplace, ask lenders about their qualification policies if you use 401K money to purchase a home.
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