· Borrow from a 401(k). Only some companies allow this. The maximum available is $50,000 ($100,00 if both spouses apply) and the loan must be repaid within five years or the loan will be considered a withdrawal, leaving the borrower liable for penalties and federal income tax.
· Withdraw up to $10,000 from an IRA. Spouses who both have IRAs can withdraw a total of $20,000. A potential borrower who hasn't owned a home in the past three years is considered a "first-time buyer" for this specific purpose. Federal taxes must be paid on the withdrawal at the borrower's current marginal tax rate.
· A gift. If buyers are comfortable asking for money, their parent's friends, and relatives can give a gift toward the downpayment. But for the lender to approve it, the giver must sign a gift letter stating that the money doesn't need to be repaid.
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