(Closed) Home Buyer's Plan

posted 5 years ago in Home
  • poll: Would you use the HBP
    Yes - I did : (2 votes)
    6 %
    Yes - I would if I could : (4 votes)
    11 %
    Maybe - only if I needed it to have a 20% downpayment : (8 votes)
    22 %
    No - I wouldn't : (16 votes)
    44 %
    No - I didn't : (6 votes)
    17 %
  • Post # 3
    Member
    5774 posts
    Bee Keeper
    • Wedding: May 2011

    You can do this in the US too. I took a loan against my 401k and will pay it back over 10 yrs.

    Post # 5
    Member
    5774 posts
    Bee Keeper
    • Wedding: May 2011

    @AB Bride:  They don’t call it that but a regular 401k loan must be paid back in 1-60 months, a loan for a primary residence can be as long as 180 months. I just chose 120 months.

    Post # 6
    Member
    67 posts
    Worker bee
    • Wedding: August 2011

    I wouldn’t only because I’d be worried what happened to our good friends would happen to us as well.

    A friend of mine who worked at the same company I did, took out a primary residence loan from her 401K, with low payments per month to pay it back.  However she ended up being let go from the company due to downsizing, and had 30 days from her termination date to pay the rest of the loan back.  It was pretty scary because they borrowed a lot from the 401K and ended up having to take out a personal loan from their bank to pay it back in time.

    Post # 8
    Member
    67 posts
    Worker bee
    • Wedding: August 2011

    @AB Bride:  Maybe its different for the RRSP compared to taking the primary residence loan from a 401K? All I know is they had to pay it back in that time, and her husband, who is a lawyer, couldn’t figure out a way to get out of having to do so in the time that was demanded by the company.

    Post # 9
    Member
    5774 posts
    Bee Keeper
    • Wedding: May 2011

    Oh yeah, if you leave the company before the loan is paid off you have 30 days to pay the balance. Other option is to withdraw the funds completely and pay the penalty (not a good option).

    Post # 11
    Member
    13102 posts
    Honey Beekeeper
    • Wedding: July 2010

    I wouldn’t – if you pull the money out of those investments, you are losing the growth that money would otherwise be earning.  Retirement accounts are the most beneficial when you put money in them early and leave it alone so that it can continue to compound and grow.

    Post # 12
    Member
    2820 posts
    Sugar bee
    • Wedding: February 2013

    No. I’ve heard REALLY bad things about that. Supposedly the penalties are really bad. (Plus FH & I currently have empty RRSPs.)

    Post # 14
    Member
    10369 posts
    Sugar Beekeeper
    • Wedding: September 2010

    I think it’s a horrible idea. I would never, ever, ever touch retirement savings to buy a home. The ROI is not anywhere near worth it. If you can’t afford a home without dipping into your 401k, then you can’t afford a home.

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