Did you know if you are a first-time homebuyer or have not owned a home in the past two years, you are allowed to make a penalty-free withdrawal from a personal IRA account of up to $10,000. Each person is allowed to withdraw up to $10,000 in their lifetime penalty free. So if you and your partner are planning to buying a house for the first time, you both can withdraw up to $10,000 for a combined maximum total of $20,000 to use for part of the down payment! That can be very useful when buying a home in Northern Virginia.
Normally, there is a 10% penalty for withdrawing money from an IRA account before you turn 59.5 years old. It should be noted that if you have a traditional IRA, you still have to pay taxes on the money when making the withdrawal. Also, when making the withdrawal, you have to use the money within 120 days to avoid the 10% penalty.
To learn more about the home buying process, check out my Buyer's Guide here! For a free home buying consultation, give me a call at 703-350-8800 or email me at blake.davenport@longandfoster.com.