Retirement Funds for Home Purchase

Retirement Funds for Home Purchase

For the person who has good credit and income but not enough money for the down payment on a home, their qualified retirement program could offer them some help. The rules are different depending on whether it is a 401(k), a Roth IRA or a traditional IRA.

Up to half of the balance of a 401(k) or $50,000, whichever is less, can be borrowed by the owner at any age for any reason without tax or penalty assuming the employer permits it. There can be specific rules for loans from 401ks that would determine the repayment; interest is usually charged but goes back into the owner’s account. You can consult with your HR department to find out the specifics.

A risk in borrowing against a 401(k) comes if your employment ends before the loan has been repaid. The loan may have to be repaid with as soon as 60 days to keep the loan from being considered a withdrawal and subject to tax and penalty. Even if you continue with the same employer, failure to repay the loan could be considered a withdrawal also.

Roth IRA owners can withdraw their contributions tax-free and penalty-free at any age for any reason because the contributions were made with post-tax income. After age 59 ½, earnings may be withdrawn as long as the Roth IRA have been in existence for at least five years.

Traditional IRAs have a provision for first-time buyers which include anyone who hasn’t owned a home in the previous two years. A person and their spouse, if married, can each withdrawn up to $10,000 from their traditional IRA for a first-time home purchase without incurring the 10% early-withdrawal penalty. However, they will have to recognize the withdrawal as income in that tax year. For more information, go toIRS.gov.

Another interesting fact about this provision is that the taxpayer making the withdrawal can help a relative includes children, grandchildren, parents and grandparents.

If you want more information to clearly understand the issues involved relative to your specific situation, talk to your tax professional or consultwww.IRS.gov.

Bret

Wilson

Keller Williams

Flower Mound TX

(214) 315-9465

bret.wilson@kw.com

Build Wealth with Real Estate - Investors: More Sales and Higher Prices

Investors: More Sales and Higher Prices

 Thursday April 28th, 2016  For Buyers, Housing Market Updates, Pricing

The National Association of Realtors recently released their 2016 Investment and Vacation Home Buyers Survey. The survey revealed many characteristics of both vacation home purchasers and investors. Two weeks ago, we posted on the vacation home market. Today, we want to concentrate on the investor real estate market.

The survey revealed that investment-home sales in 2015 jumped 7.0 percent to an estimated 1.09 million from 1.02 million in 2014.

Lawrence Yun, NAR’s chief economist discussed the increase in the number of sales:

"Despite a smaller share of distressed properties coming onto the market, investment purchases reversed course in 2015 after declining for four straight years. Steadily increasing home prices and strong rental demand appear to be giving more individual investors assurance that purchasing real estate will diversify their portfolios and generate additional income if they decide to rent out the home."  

Prices Are Also Up

The price paid by investors also increased in 2015 by 15.3%.

New Home Buyers Look For Green Options

Home Sales Skyrocketing!!

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Home Sales Skyrocketing!! Posted: 23 Apr 2015 04:00 AM PDT Yesterday, the National Association of Realtors (NAR) released their Existing Home Sales Report. The numbers shocked many analysts as they revealed a 10.4% increase over the same month last year. This is the highest number of sales since September 2013. Sales have increased year-over-year for six consecutive months and the 10.4% increase is the highest annual increase since August 2013. March's sales increase was the largest monthly increase since December 2010. Lawrence Yun, NAR’s chief economist, explained: "After a quiet start to the year, sales activity picked up greatly throughout the country in March. The combination of low interest rates and the ongoing stability in the job market is improving buyer confidence and finally releasing some of the sizable pent-up demand that accumulated in recent years." Here is a graph showing home sales so far this year: An increase in sales occurred in every region of the country even the Northeast that experienced one of their roughest winters in years: Bottom Line Houses are flying off the shelves. This may be the perfect time to sell yours.

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