Tuesday, September 23, 2008

First Time Home Buyers and Types of Loans

First-Time Home Buyer5.3 Pensions/Annuities/Retirement Plans :

Types of Plans-

Can I withdraw funds penalty free from my 401(k) plan to purchase my first home?
If you are under the age of 59 1/2, you cannot withdraw funds from your 401(k) plan to purchase your first home without being subject to a 10 percent additional tax on early distributions from qualified retirement plans. However, depending on the rules for your 401(k) plan, you may be able to borrow money from your 401(k) plan to purchase your first home. Your plan administrator should have written information about your particular plan that explains when you can borrow funds from your 401(k) plan as well as other plan rules. Publication 560 and Publication 575 and Tax Topic 424 and Tax Topic 558 are available for further guidance.

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