The hardest part of home ownership is not buying a home.

It’s keeping that home.

It’s an uphill battle for many people to even attempt to buy a home.

I have been renting for most of my life. I decided that owning a home would be too impossible an objective to achieve.

Furthermore, I was financially irresponsible, financially illiterate, and had a compulsive debtor mindset. As a young man, the idea of living without debt was incomprehensible to me.

And when you think like that, owning a home is like trying to lasso a unicorn – an impossible dream.

The only way to recognize opportunity is to educate oneself and upgrade mindsets.

I’ve been teaching myself about personal finance, investment, and home ownership for years.

I am learning that the best was to own a home in the United States is to understand the system. And, to make it work for you.

For instance, everyone knows that homes are too expensive.

In the fall of 2019, the average price of a new home was $400,000.

As of March 2020, home sales fell by almost 21%, the worst in a decade. The interest rate for a 30-year fixed-rate mortgage fell to 3.43%.

The average price of a home was $321,000 a few weeks ago.

Now, it is $309,000.

The devastating global economic crisis caused by the pandemic is a major factor.

If you have a retirement fund you can borrow money from it, without penalty, to pay a mortgage down payment.

I wish I had a retirement fund.

Withdrawing From a Retirement Fund to Buy a Home

If you own a 401(k) or an IRA, you can borrow against it to pay a mortgage down payment.

You and/or a spouse can’t have previously owned a home 24 months prior to applying for the loan.

If you own a Traditional IRA or Roth IRA, you can withdraw up to $10,000 to pay a down payment on a new home.

You can use this money to build, rebuild, or buy a new home.

The 10% early withdrawal penalty will be waived.

There is no tax penalty with a Roth IRA, but you must pay taxes withdrawing from a Traditional IRA.

If you and your spouse own retirement plans, you may be able to withdraw $20,000 together. Consult your retirement plan administrator for more details.

Own a 401(k) plan? You might be able to withdraw half the value of the plan, but not more than $50,000.

Also, with the passage of the CARES Act, you may be able to borrow up to $100,000 from a 401(k). However, you must prove that you or a close relative recently contracted the coronavirus.

Additionally, you must be able to prove that a recent coronavirus infection catastrophically devastated your personal finances.

Seriously, consult your retirement plan administrator about these retirement loan opportunities. The CARES Act legislation has provisions which allows for the relaxing and extension of repayment terms as well.

If you know how the system works, buying a new home might not be as impossible as it seems.

I wish I understood that a decade ago.

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