What are the penalties if you withdraw from your 401k to purchase a home?

Answer by  frogie (86)

Usually whomever you have the 401 through like the business will charge you 10% for early withdraw. Also the 401 fund will also charge you a early withdraw. This money is then taxable.

Answer by  oldmom (716)

You can borrow money from your 401k and not pay penalties if you pay the money back in regular payments. A hardship withdrawal is possible, but carries a penalty. It is best not to tap your 401k for anything.

Answer by  atman (308)

If you are a first time home buyer, you can take out a loan from your 401K and use the money to purchase the home. There will not be any penalties but there may be interest. Contact the company that your investment is with for details of your plan.

Answer by  step (309)

If you are a first time home buyer you can withdraw up to $10,000 with no penalties. But you still have to pay the income taxes on the money. If you are not a first time home buyer the penalty would be 10% plus income taxes.