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Could Your Retirement Savings Help with your Mortgage?

mortgage paymentsIf you are in the market for a new home and short on cash, you might have considered using your IRA or 401(k) to purchase your new dream home especially with today’s stricter mortgage guidelines. You might even be considering using your retirement funds to put a larger down payment on the home to free up cash for a monthly mortgage payment instead.

According to Roger Wohlner, financial expert at the

Equifax Personal Finance Blog,  you need to think long and hard about this before you take that step. His recent post, “

Should You Use Retirement Savings to Pay Off Debt?” warns of the large tax penalties you could incur if you dip into tax-deferred retirement savings accounts.

Wohlner explains that if you take the money out of your retirement account, you’ll pay taxes on it according to your tax bracket, so $10,000 will cost you an extra $2,500 if you’re in the 25 percent income tax bracket. (Continued…)

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