[Norsmn]

Is there any advantage for me to withdraw $30k from my IRA, rather than borrowing the money at 5% APR for a home mortgage for 10years? My annual income is about $35,000 and federal tax rate 15% and state 10%

[Fr_Chuck]

It would be much better normally to borrow the money than take money from the IRA

[ebaines]

If you need cash for the down payment there is a bit of an advantage in withdrawing up to $10K from the IRA if the purchase qualifies as a "first time" home purchase for you. You can withdraw up to $10K for this purpose and not have to pay the usual 10% early withdrawal penalty. However you would have to pay federal & state/local income tax on the portion of the withdrawal attributable to post-tax contraibutions and earnings (unless this is from a Roth account that has been active for at least 5 years). So if you withdraw $10K you can expect to pay 25% in federal and state income tax, leaving $7500 to help with your down payment. I would advise against taking more than $10K, as any amount above that will cause an additional 10% tax payment for the early withdrawal penalty.