SAN DIEGO, Sept. 24, 2013 /PRNewswire-iReach/ -- LoanLove.com is a borrower advice website that provides detailed insights into the mortgage industry in a fun and entertaining way. The team at LoanLove.com is devoted to help empower both first time and experienced homeowners with valuable resources, first-class knowledge and connections to top-rated industry professionals and has the mission of helping consumers and borrowers to obtain the latest information on mortgage lending trends, the real estate market and the U.S. financial landscape in order to help them obtain a home loan that they will love. The mortgage borrower advice website aims to help customers and loan borrowers by tackling their inquiries on the advantages and disadvantages of a 401k withdrawal for home purchase. Loan Love brings to its readers a brand new article titled "Should You Use A 401k Withdrawal For Home Purchase? (Pros/Cons)" that gives all the details a home owner should know when withdrawing from their 401k fund.
Many future retirees may find a 401k fund to very practical; It continues to grow during their employment and well into their senior years. It is generally a good idea to leave a 401k fund untouched until after retirement, but this may not always be the case. Often times a home owner may be snared down by financial liabilities when making closing costs on a home's payment, leading to home buyers to hastily make a withdrawal from their 401k fund. The Loan Love article suggests that there are alternatives home buyers can make before dipping into a 401k withdrawal :
"Taking money from your 401K seems like a good choice – it's your money, so why shouldn't you use it? Most retirement blogs or guides you read warn strongly against 401K withdrawals, thanks to penalties and fees for tasking your money out early (this is a retirement account, after all). But is it always a bad choice? And what are your alternatives?"
There are 3 main key factors future retirees may want to look into before taking out money from a 401k. One of the factors the article demonstrates is for home buyers to take on a second mortgage loan from their lenders or if turned down, to seek another loan lender for a mortgage with paying down payment. Another idea is for the home buyer to ask a lender if they can provide a larger mortgage loan – of about 90-95% of their home's value - by allowing them to pay Private Mortgage Insurance, or PMI for short.
One final idea the article brings forth is to take a loan directly from a 401k. As the article mentions: "Many people don't know they can use their 401k as a source of loans (assuming your employer allows it). In this scenario, your account serves as a lender; you pay interest, but that interest is paid back into your account, to help make up for the earnings you'll lose by taking out some of the principal. Here, the major risk is that if you lose your job before paying back your loan, you have to pay back the loan in full within a pretty short period of time – usually a couple of months – or else it will be considered a withdrawal and all those penalties will apply."
Once a loan borrower has explored their options all that is left is to calculate and find the best possible solution for their budget and income. To lean more on 401k withdrawals for home purchases, please read the full article on LoanLove.com
Media Contact: Kevin Blue, LoanLove.com, 949-292-8401, firstname.lastname@example.org
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