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Using Roth/Traditional IRA funds for a first home
edited February 2012
My wife and I are using some IRA funds to pay for our first house. The closing costs are turning out to be cheaper than we anticipated; can we use some of the money for moving costs, repairs, etc?
Post edited by Unknown User on
http://www.investopedia.com/terms/q/qua ... z1kVkXYTU3
Also, the money must be spent within 120 days of the distribution to qualify.
Definition of 'Qualified Acquisition Cost'
These are items, in the context of IRA withdrawls, that constitute penalty free withdrawls for an IRA owner who uses the assets to purchase a first home.
Investopedia explains 'Qualified Acquisition Cost'
These include the following items:
- Costs of buying, building, or rebuilding a home.
- Any usual or reasonable settlement, financing, or other closing costs.
Do you know what happens if I take, for example, $10K out, but the down payment only ends up being $9K? Do I just put the extra back into an IRA (a different one, because I closed that one when I took the money out)?
As long as it's within the 120 day window, you can put it into an IRA and treat it as a roll-over. The other thing you could do is increase your downpayment on the house to use up the full amount.
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