drrajkumarParticipantStatus: PhysicianPosts: 3Joined: 09/06/2017
We are planning to buy a new house next month. We aggressively paid mortgage on the current house we live in. As a result, lot of money is tied up in the house. We need to sell the current house and use the money for downpayment on the new house. Our realtor told us today that it will decrease our choices and will be difficult to do. Is it a good idea to take the original contribution from ROTH for downpayment and return it when my current house sells? I also have enough money saved in Vanguard investment account primarily in mutual funds. Is it better to sell the funds in the investment account to cover downpayment (I will be stuck with taxes on capital gains). Appreciate your advice. Thanks.April 12, 2019 at 4:48 pm MST #206120spiritriderParticipantStatus: Small Business OwnerPosts: 1626Joined: 02/01/2016
You can do a 60-day rollover, but you can not take a loan from any IRA. 60 days is a very short time period for what you want to do.
After 60 days it will be treated as a distribution. Contributions can be withdrawn at any time tax and penalty-free, but earnings are subject qualification status. Other than current year returned contributions, you can not re-contribute any amount withdrawn.
Other options would be a 401k loan and/or a margin loan on the investments. However, the mortgage underwriters would likely have a problem with other loans to meet down payment requirements.DreamgiverParticipantStatus: PhysicianPosts: 687Joined: 03/09/2017
This is done all the time, you buy a house with a contingency specifying that if your current home does not sell the deal is up. Yes, some sellers might not accept your offer but such is life. On the other hand, if the local market is hot, your house will sell and everyone is happy. If the market is not hot, your house will take longer to sell but it makes the seller of the house you are interested in more likely to accept your contingency due to a lack of buyers. I would not take a loan out of your retirement accounts unless you know for sure you can pay it back within the specified timeframe for it not to be considered a distribution.PedsParticipantStatus: PhysicianPosts: 3399Joined: 01/08/2016ENT DocParticipantStatus: PhysicianPosts: 2916Joined: 01/14/2017
Why the new house?April 12, 2019 at 5:33 pm MST #206129drrajkumarParticipantStatus: PhysicianPosts: 3Joined: 09/06/2017
Thank youApril 12, 2019 at 5:34 pm MST #206132LordosisParticipantStatus: PhysicianPosts: 619Joined: 02/11/2019
Depending on how much you need can you do a heloc on your current home?
“Never let your sense of morals prevent you from doing what is right.”April 12, 2019 at 5:35 pm MST #206133