[HELENACOSTA]

I am 70 years old. Planning to borrow 50.000 from 401k to buy a house. I am divorced.the house is going to cost 150.000 total. What are the pro/cons?

[ScottGem]

Are you still employed with the company? Generally 401k loans are only for current employees.

However, since you are 70, you can withdraw the money without penalty but would have to pay taxes on it.

Another possibility might be rollover the 401K into an IRA and then invest the IRS in a mortgage. Not sure if that's possible, but its something to explore.

[ebaines]

You can't "invest" your IRA in your personal home. You may be thinking about investing in rental property, which is possible but must be done in a very careful and precise way to avoid mixing of your IRA funds with other funds.

To the OP: I aree with Scott's suggestion to use the 401(k) for your down payment, assuming that you can afford to do so as opposed to using it for living expenses. But be aware that if you take the $50K from your 401(k) it counts as ordinary income, so it may put you in a higher tax bracket than you are used to. As a general rule the 401(k) plan administrator will withhold 20% for federal income taxes, but don't forget that depending on where you live you may also have state and/or local income taxes to pay as well. Also, as an aside, you're probably aware that at age 70-1/2 you are required to take a minimum amount of distribution each year from your 401(k).

[joypulv]

Why such a big down payment? Put down 20% and grab a low interest rate while you still can.

[ScottGem]

Why such a big down payment? Put down 20% and grab a low interest rate while you still can.

Possibly to reduce monthly payments?