401K to Avoid Foreclosure


You will want to be very careful when considering using your 401k or IRA to pay up your mortgage. It still can be a good solution to avoiding foreclosure. One of the main advantages of using an IRA or 401k is you have up to 60 months to pay it back if you take a loan from the account, There are no credit checks, whatever you choose to do, you will be able to do it since It is your money.

The loan payment is deducted from your paycheck. You can get up to 50% of your retirement money or $50,000 which ever is less if you get a loan and as long as you do not default on your payments, you will not have to pay any penalties. You can also be eligible for what they call a hardship distribution, but will have to pay income tax on the money.

The reason why I said that you have to be careful in the beginning is because taking money out of your 401k can be a bad solution if you are getting close to your retirement. You will have to pay it back with interest if you lose your job and default on the loan. If you qualify for a hardship distribution you will still have to pay income tax on the money if you decide to just take cash withdrawal, you will have to pay IRS the 10% penalty along with income tax.

If tapping into your 401K or IRA to avoid foreclosure is your last resort, then taking out a loan from your 401k would be the better choice. At least you will be putting the money back with interest. You will want to make sure this solution will alleviate the problem and not add to it.

If you are looking for more ways to avoid foreclosure without using your own money or your 401k, then you will want to go to my blog to get more resources instead of pushing the panic button. If you or a loved one is in trouble with their home, then you will need to look through my blog now.

http://lmodification.blogspot.com/

Behind on your payments already? Or you know you are going to? Pleas TAKE HEART.Your situation is not hopeless.
You may be facing foreclosure because of an unexpected job loss, a shocking and sudden accident or a change in the health of yourself or a loved one. Or you could be a victim of banks' irresponsible lending spree in the past 5 years.
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One Response to this post

  1. Sara on June 3, 2010 at 2:11 AM
    This comment has been removed by a blog administrator.