Hello Mustashians,
My wife and I (early 30's) live in a HCOL area and have been saving for a down payment on our first home. My wife has an old employer 401K ~$7,500 in it and we're considering paying the withdrawal penalty and rolling it into our home down payment. What are your thoughts on that? We're tired of renting and this could get us to our down payment faster. We signed a 10mo lease and can buy next year at this time. Looking for advice.
Breakdown:
We are Debt Free (Recently Dec 2019), no kids
Monthly Income - $7,500 ( We're putting money into the down payment fund and maxing our Roth IRA)
Renting/Bills/Expenses - $2,500/mo ($1,600 Rent 1bd, 1ba)
Current down payment savings: $22K
Old 401K possibly add to down payment: ~7,500
Other active Retirement accounts (401K, IRA, Roth) - ~$172K
Our plan was to get 40-50K down before buying, avoid PMI, and keep the loan smaller. The housing market where we are has not seen any effect from the current environment. Housing is in short supply and with rates so low people are still buying what homes are available. So many of our peers have bought homes with far less money down and housing prices out here continue to climb, meanwhile rent continues to go up.
(Punch me in the face if need be) Cheers