I want to use my 401k for the purchase of my first home,I was told by my plan administrator that they didn't do that and that I would have to quit working there to do so is this legal?
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I want to use my 401k for the purchase of my first home,I was told by my plan administrator that they didn't do that and that I would have to quit working there to do so is this legal?
Yes it's legal. Most plans do not allow active employees to make withdrawals. But you may be able to borrow from your plan account, which usually makes more sense anyway, since you won't have to pay taxes or pay a penalty for borrowing from your 401(k) account. Ask your plan administrator about that possibility.
Yea I tried that already no loans either supposedly! Should I contact a lawyer?
No, it would do no good. The purpose of a 401(k) is to save for retirement. The tax laws that created 401(k) accounts do not require companies to allow withdrawals or loans. You should read your plan's rule. What can be allowed has to be spelled out in those rules.
Hiring an attorney will only be a waste of money.
Contact a lawyer? What for? I suggest you read over the plan documents to see under what conditions an active employee can make withdrawals or take loans, if any. Most plans allow loans, but since all plans vary it really depends on the specifics of your company's plan. There is nothing in the law that requires the plan to make loans available.Quote:
Originally Posted by starr251
Like I said I have already done all of that but thanks for your answers! I spoke with the company that I work for and the 401k also, they both said no loans or early withdraws I really need the money that the only reason I asked if I should contact a lawyer I am up aainst a wall here and don't know what to do?
Starr: If you are interested in buying a home you must first get your personal savings to a point where you can afford the down payment and also have a cushion for emergencies. It sounds like you may not have much savings reserve outside of your 401(k). My advice is that you get your savings up to the point where you have a good 4 months or so of "cushion" available, in addition to the amount needed for a downpaymnet (10% or so of the purchase price), and then start looking. If you don't have that level of savings, you should think twice about trying to buy a home.
Yes I have a down payment just not the lot of 20 percent my house burned about a month ago and my family really needs a decent home to live in
Not really off topic... but I assume you are preapproved for a loan and not just pre-qualified. Actually getting a loan today isn't a sure thing even if you had one before. What I'm saying is you might be rounding up all the players for your team... but if the bank isn't going to let you play the game...
I am APROVED for my loan all I need is the remainder of my down payment, thanks for the question though!!
Umm, if your house burned down, didn't your insurance cover enough to either rebuild or buy a new one?
No didn't have any insurance! This is getting way to personal! But I do appreciate the response.
No sweat... a lot of people are getting shocked trying to get loans or refinance recently... just wanted to make sure all your efforts aren't for naught.Quote:
Originally Posted by starr251
How is this getting personal? We are trying to help.Quote:
Originally Posted by starr251
I hope you have learned your lesson and make sure you have insurance on your next home. Probably your lender will require it.
There is no way to force a company to give you money from a 401K. It is given out only by the terms of the contract that you agreed to when you started putting money into it.
You could have course quit and have access to the money.
Thank you everyone for all the help and lesson learned about the insurance! And yes my lender will include it in my monthly payment thank you again you have been more than helpful!
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