Can money from a 401k loan for a first time home go towards a down payment AND closing costs?
Wednesday, February 17th, 2010 at
6:43 pm
Donna S asked:
I know I can use a loan from my 401k towards the down payment. If I have some money left over from the 401k after that, can I use the rest for the closing costs?
I know I can use a loan from my 401k towards the down payment. If I have some money left over from the 401k after that, can I use the rest for the closing costs?
Tagged with: 401k Loan • First Time Home • Money Loan
Filed under: Retirement
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That is one of the legit reasons 401k can be touched. Yes you can use any monies remaining for closing cost. The check should come in your name anyway.
If you took the money as a LOAN from your 401(k), you can use it ANY way you wish. If you WITHDREW the money from your 401(k), you WILL pay FEDERAL income tax on the FULL amount. I don’t know if there is an exception from the 10% early withdraw penalty for home purchases.