I have a offer on the table for a new job which makes homeownership an actual possibility. I'm currently in a VHCOL area and since I didn't see much use in saving for a down payment since I can't afford a $700-800k mortgage, I've been actively paying down debt.

Between my little savings, the extra I'd make from cashing out my vacation etc, I have enough for a down payment on a modest home in the new area, but not enough to cover both the down payment and the closing costs. I was hoping to make up the difference leveraging my 401k, but since in this scenario I'll be taking a new job, it makes the logistics difficult. I can't just take a loan from my 401k at my current employer, and rolling into a Roth I can withdraw $10k, but only if I've had the Roth for 5 years apparently.

Is there any way I can leverage my retirement funds for a home in the New area?

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np20412 t1_iuink2s wrote on October 31, 2022 at 4:51 PM

not without taking a distribution, no.

I suggest you rent for a yearr or two, make sure you like the new city/state to make the right decision on which neighborhood/area you want to be in, and ensure you'll be staying longer than a few years, and use the time in the interim to save up appropriately.

darkwing42 OP t1_iuird0i wrote on October 31, 2022 at 5:17 PM

Darn, I pretty much came to the same conclusion, but with good homes available at under $300k I got stars in my eyes and was hoping for a hail mary.

I suppose waiting a year won't be so bad, it'll give some more time for home prices to drop further and rent for a similar place I'm at now is about half the price, so saving will be easier, and with my signing bonus and relocation package I can cap off the last of my debt.

SonOfMcGee t1_iuixp0q wrote on October 31, 2022 at 5:58 PM

LCOL places are that way for a reason. Always rent first if you’re moving to a different state.

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wallflowerincognito t1_iuiz31h wrote on October 31, 2022 at 6:07 PM

I don't know if you could use retirement income, but have you looked into home buyer grants in your area? In some states these are available even if you aren't a first-time buyer. Depending on the grant you can use it either for down payment or closing costs. There may be income requirements.

Bank of America has some similar grants if you finance through them: https://www.bankofamerica.com/mortgage/affordable-housing-programs/