Withdraw from IRA to buy a house

by debtguru

You can’t borrow against your IRA, but you can take out a certain amount to pay for your first home. The government lets you take out up to $10,000 to buy your first home. This money is taxed when you take it out (just like it would be when you retire), but there is no 10% penalty.

Combining this with the $8,000 stimulus credit that runs through November 2009, this can give you $18,000 to work with. The downside is that your IRA is probably worth less now than it was when you put the money in, so you may have to take a loss to take the money out.

Still if you find the right house, it could be a useful means of getting some extra cash together.

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