Can You Use A 401(k) Loan For Down Payment On A House? - YouTube

I heard a very interesting question the  other day is: "Can you use a 401k loan as  

a down payment for a house?" and my ears perked  up. You'll get the answer here in just a minute.

Can you use a 401k loan for  a down payment on a house?  

Yes, you can. Now, you just need to do it right  because you don't want to get in trouble, right.  

But we're going to teach you how to do it right. Also, stick around because I've got a  

freebie for you at the end of this episode  and you're really going to appreciate it.  

So, if you've seen in previous episodes. We talked  about how much can you borrow from your 401k.

And if you're borrowing it for a down payment  on a home it's all the same nothing changes.  

You can borrow 50% of what you have in your account up to a maximum of $50,000.

Doesn't matter if it's for a down payment  or anything else there's a limit always on that.  

You've probably also heard in episodes that your  401k demands that you pay it a reasonable rate.  

Now, there's a tendency to say, "Wow, I could get away  with 0 interest if I'm loaning to myself." or if  

you really want to get a lot of money into your IRA. You say, "Man, I could pay myself 50%."

Well, neither one of those rates are reasonable. It  seems to be that a reasonable rate is somewhere  

between prime plus 2 on the low side and 12  on the high side. And that's the same whether  

you're getting a down payment or you just want a  loan from your IRA to go buy an ice cream truck.  

Here's where the answer differs, if you're  gonna borrow from your 401k for a down payment  

I have very good news for you. Instead of having  to pay back the money in a 5 year period  

which that's normal. If you borrow money from  your 401k for anything else in the world you'd  

have to pay it back in equal installments over  a 5 year period, that is to say. The longest  

you could drag it out is through a 5 year  amortization but if it's for your down payment  

you get to stretch it out over 30 years. This is a  coup my friends, this is a great use of your money.  

Check it out, 30 years you can borrow a down  payment up to 50% of what you have  

in the account or 50,000. So, you can  get 50,000 for a down payment on a  

piece of property you love. A valuable piece  of property that's going to go up over the  

years and you could stretch the payment out on  that down payment over 30 years, that's amazing.  

You know, I learned a lot of this information from  my friend Tim Berry over at taxfreefuture.com, and  

he's the one that has enlightened me so much. As to what I can do with these 401ks, and these IRAs  

traditional and roth with health savings accounts,  with educational accounts for your kids college.  

He's enlightened me so much about it that I was  enthralled to have tax-free future as a sponsor.  

Please go to taxfreefuture.com   I interviewed Tim Berry personally,  

and we have 37 video vignettes that talk about  all kinds of things like what I just told you. 

The secret to becoming wealthy is to think  like the wealthy. This is what they're doing.  

These are the vehicles they're using. These are  the strategies and the tactics that they're  

taking advantage of purely legal strictly legal  afforded to everybody in the whole world,  

and we're going to tell you how to do it.   The difference between being poor and being rich is  

knowledge and work ethic. We're trying to  give you that knowledge so it's up to you to put  

in the work. I appreciate you for being on the  episode, if you like this kind of conversation  

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