Should You Use Your Retirement Savings To Buy A Home? (FORBES)

First-time home-buyers are often surprised by the requirements of obtaining a mortgage, especially when it comes to the down payment. One way you can improve your chances of getting a home loan is by putting at least 20% down at the time of purchase. For existing homeowners like me, coming up with a 20% down payment usually starts with selling the home I’m in right now and using the equity to make a down payment on my next home.

But what about someone that may be buying a home for the first time? Coming up with a $50k down payment on a $250k home may take several years of aggressive saving, but your retirement account may not be a bad place to go for the additional funds needed to get you on the path to homeownership. In fact, the IRS offers certain breaks for taxpayers that choose to use retirement assets to purchase a first home. Here’s how it works.

Who qualifies as a first-time home buyer?

Interestingly enough, you don’t actually have to be buying a home for the first time in your life to be considered a “first-time” home buyer.  IRS publication 590 defines a first-time home buyer as any home buyer that has had no present interest in a main home during the 2-year period ending on the date of acquisition of the new home. In other words, as long as you haven’t lived in a home you owned for the last two years, you are considered a first-time home buyer even if you owned a home previously. If you are married, your spouse must also meet this no-ownership requirement.

Using your IRA

Most people know that when you take money out of a traditional IRA prior to age 59½, there is usually a 10% penalty for early withdrawal. However, the IRS offers an exception that allows you to withdraw up to $10,000 over a lifetime without penalty for first-time home purchases. Keep in mind that while the distributions are not subject to penalty, they are still subject to income taxes. $10,000 probably won’t be enough to cover your full down payment, but it can help.

Read complete FORBES article here.

 

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ATTN HOMEOWNERS : May Is The Best Month To Sell

If you are considering listing this spring, now is the time.

May is the best bet for home sellers, according to an analysis by ATTOM Data Solutions, which found that the average seller gains 5.9 percent more than market value—the highest of all months—in the fifth month of the year.

June is profitable for sellers, as well, with an average 5.8 percent premium, with June 28, pointedly, reeling in 9.1 percent—the best day of the year. May 29 and May 31 are also high-returning, with an 8.2 percent premium and an 8.3 percent premium, respectively.

For homeowners, the key is timeliness. According to the analysis, the advantage drops off sharply after June, with a 3.8 percent premium in July, a 4.2 percent premium in August, and back down to a 3.2 percent premium in September. Through the remainder of the year, the average seller earns between 1.6 percent and 2.6 percent over market value—considerably less than had they acted during the May peak.

The analysis findings’ are reminiscent of spring 2017, when May 1 through May 15 was found to be the ideal listing window. The difference now is that inventory is tighter—down 7.2 percent year-over-year—and, although homeowners are getting multiple offers, there is the burden of buying another home at the record prices they are today.

Still, it is a seller’s market, and the numbers have it: In the first three months of 2018, the average seller recouped 29.5 percent, or $53,369 at resale.

Read complete RISMedia article by Suzanne De Vita here.

Featured image from NEW LISTING on Whitefish Lake.

707 Delrey Rd

Slow down and enjoy summer! This comfortable log retreat at the quiet end of Whitefish Lake rests on 2 acres and it’s shoreline spans 155 feet of natural, rocky terrain. An open floor plan, rock fireplace, and main floor master make living easy whether enjoying the privacy or entertaining guests. Sit outside and enjoy the fresh Big Sky air on the covered and uncovered decks or extensive outdoor rock work designed gathering areas. Call Ed Meek (406)270-4792 or Kelly Laabs (406)890-5451 or your real estate professional.

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