Buying a home can be difficult especially if you do not have a down payment. In this video I will explain the different options I considered when I bought my first home and how I took a 401K loan out to put a 20% down payment. By doing this I avoided paying for PMI (private mortgage insurance). A 401k loan for home purchase is an option for putting a down payment on a house. When you buy a home it is also important to how much interest you will be paying on your mortgage. If you do not put 20% down on a home purchase will need to pay PMI. Your PMI payment will not reduce your mortgage and if you have to pay PMI this is money that will not build equity in your home. It is also very important to understand that by putting 20 percent down on a home it will ultimately save you thousands of dollars in interest. I will go over the numbers and calculations that will shock you but ultimately help you decide if this is a strategy for you. Please follow me on all my other social media platforms #401kloan #buyahome #401kloantobuyahome This is Not financial advice. This is For ENTERTAINMENT PURPOSES ONLY. Please consult a licensed, qualified CPA for professional tax advice....(read more)
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A 401k loan refers to a loan you take from your retirement account. The plan allows you to borrow money from your 401k and pay yourself back with interest. It sounds like a great solution to a money problem, but it’s wise to understand the pros and cons of a 401k loan before you make this step. Pros - No hassles: A 401k loan is simple and easy to obtain. You complete the necessary paperwork and the money is deposited into your account. There are no credit checks or lengthy applications. This means that you can get your hands on the money quickly. - Low interest rates: The interest rate on a 401k loan is typically lower than a personal loan or a credit card. The rate is usually a few points above the prime rate, which makes it an affordable solution. - You pay yourself back: Unlike a personal loan, where you pay interest to a lender, a 401k loan allows you to pay interest to yourself. Since you are borrowing from your retirement account, you are essentially paying yourself back. Cons - Risk of default: A 401k loan carries the risk of default. If you lose your job or leave the company, the loan must be repaid immediately. If you are unable to repay the loan, the outstanding balance will be treated as a withdrawal, and you may be subject to taxes and penalties. - Reduced retirement savings: A 401k loan takes money out of your retirement account, reducing the amount you have saved. This means you lose out on potential earnings and compounding interest. - No tax benefits: Contributions to a 401k have tax benefits. A loan, however, doesn’t offer any tax advantages. You must pay the loan back with after-tax dollars. Conclusion A 401k loan can be a great solution to a short-term money problem. However, you must consider all the pros and cons before taking a loan. A 401k loan is not free money, and there is a cost to taking the loan both in terms of lost retirement savings and potential taxes and penalties. Always consult with a financial advisor before making any decisions regarding your retirement savings. https://inflationprotection.org/loan-using-401k-as-collateral/?feed_id=95208&_unique_id=6457b0e8255f3 #Inflation #Retirement #GoldIRA #Wealth #Investing #401k #401kforhomedownpayment #401kloan #401kloantobuyahouse #401kLoantobuyhome #401kloans #avoidpmi #downpaymentforahome #firsttimehomebuyers #homebuyingforbeginners #homebuyingtips #homebuyingtipsforfirsttimebuyers #howmuchdownpaymentdoIneedtobuyahome #howtobuyahome #Howtogetadownpaymentforahome #Millionaireexplainshowheboughthisfirsthomeusinga401kloan #realestate #using401kloanforhomedownpayment #401k #401k #401kforhomedownpayment #401kloan #401kloantobuyahouse #401kLoantobuyhome #401kloans #avoidpmi #downpaymentforahome #firsttimehomebuyers #homebuyingforbeginners #homebuyingtips #homebuyingtipsforfirsttimebuyers #howmuchdownpaymentdoIneedtobuyahome #howtobuyahome #Howtogetadownpaymentforahome #Millionaireexplainshowheboughthisfirsthomeusinga401kloan #realestate #using401kloanforhomedownpayment
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