Posted on: 20th May, 2011 11:49 pm
I'm having a tough time for the last 9 months. I've lost my job and now I'm unable to pay the mortgage which I had taken out a few years back. I was current on my mortgage payments until I lost my job! My property has even lost its value. I applied for a deed in lieu but the lender will not listen to me (my bad luck!) Can I use money from my 401k account to pay the mortgage?
hi veronica,
it is true that unless your lender agrees to a deed in lieu of foreclosure, you won't be able to get rid of the property. if you don't pay the mortgage debts now, the lender will foreclose the property. i will suggest you to re-apply for a deed in lieu of foreclosure and try to negotiate and convince the lender about your financial situation. if the lender is convinced, he might agree to you request.
in my opinion, it won't be a good idea to take out money from your 401k account. if you do so, you'll actually deplete your requirement savings. also, if your age is less than 59 and 1/2 years, then you'll be liable for paying taxes for withdrawing money from the 401k account.
take care.
it is true that unless your lender agrees to a deed in lieu of foreclosure, you won't be able to get rid of the property. if you don't pay the mortgage debts now, the lender will foreclose the property. i will suggest you to re-apply for a deed in lieu of foreclosure and try to negotiate and convince the lender about your financial situation. if the lender is convinced, he might agree to you request.
in my opinion, it won't be a good idea to take out money from your 401k account. if you do so, you'll actually deplete your requirement savings. also, if your age is less than 59 and 1/2 years, then you'll be liable for paying taxes for withdrawing money from the 401k account.
take care.
To specifically answer your question, yes, you can use funds from your 401(K) account, but as Sara pointed out, you'll be liable for taxes; and I'm going to assume that there would be penalties that occur on an early disbursement as well.
Doing it isn't the wisest thing to do, but clearly your situation is uniquely yours, and this is a decision that only you can make. You will be very smart to speak with your financial advisor and go over all the ramifications of using that account to pay your mortgage.
Going back to the lender is a good idea, if you're still considering a sale of the home.
Doing it isn't the wisest thing to do, but clearly your situation is uniquely yours, and this is a decision that only you can make. You will be very smart to speak with your financial advisor and go over all the ramifications of using that account to pay your mortgage.
Going back to the lender is a good idea, if you're still considering a sale of the home.
