Thinking About Buying You House With Your 401K In Phoenix?

Thinking About Buying You House With Your 401K In Phoenix?

Are you dreaming of buying your own Phoenix Arizona home and wondering about how you’ll save for a down payment? You're not alone. Some people think about tapping into their 401(k) savings to make it happen. But before you decide to dip into your retirement to buy a home, be sure to consider all possible alternatives and talk with a financial expert. Here’s why.

The Numbers May Make It Tempting To Buy A Home In Scottsdale & Phoeinx Arizona

The data shows many Americans have saved a considerable amount for retirement (see chart below):

It can be really tempting when you have a lot of money saved up in your 401(k) and you see your dream Phoenix Arizona home on the horizon. But remember, dipping into your retirement savings for a home could cost you a penalty and affect your finances later on. That's why it's important to explore all your options when it comes to saving for a down payment and buying a home. As Experian says:

“It’s possible to use funds from your 401(k) to buy a house, but whether you should depends on several factors, including taxes and penalties, how much you’ve already saved and your unique financial circumstances.”

Alternative Ways To Buy a Home In Scottsdale And The Phoenix Arizona Metro Area

Using your 401(k) is one way to finance Arizona real estate and a home, but it's not the only option. Before you decide, consider a couple of other methods, courtesy of Experian:

  • FHA LoanFHA loans allow qualified buyers to put down as little as 3.5% of the home's price, depending on their credit scores.
  • Down Payment Assistance ProgramsThere are many national and local programs that can help first-time and repeat homebuyers come up with the necessary down payment.

Above All Else, Have a Plan

No matter what route you take to purchase a home, be sure to talk with a financial expert before you do anything. Working with a team of experts to develop a concrete plan prior to starting your journey to homeownership is the key to success. Kelly Palmer, Founder of The Wealthy Parentsays:

“I have seen parents pausing contributions to their retirement plans in favor of affording a larger home often with the hope they can refinance in the future… As long as there is a tangible plan in place to get back to saving for their retirement goals, I encourage families to consider all their options.

Bottom Line

If you’re still thinking about using your 401(k)-retirement savings for a home down payment, consider all your options and work with a financial professional before you make any decisions.

I am here to help you get expert information and navigate the home buying and selling process in this market by determining a great plan for you, when you are ready. Let's connect today and get you the data you need!

Contact me at 480-639-7742

Charles Fratantoni


Valley Real Estate Professionals

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