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Can my wife and I use her Roth IRA for a down payment on a home?

We own a home on Whidbey Island but my wife is not on the mortgage. She has never owned a home. We plan on buying a home in Poulsbo. When we buy a house in Poulsbo, can we use her Roth IRA as the down payment without paying a penalty? 
  • February 22 2014 - US
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Answers (3)

Hi, yes you can use the liquidated funds for the down payment as long you show a clear document trail for the underwriter. Penalties - consult your tax professional on that one. I like the Peninsula a lot, good memories there. Best of success!

  • February 26 2014
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Lenders will be fine with you doing this for the down payment. When it comes to the penalty, that is not up to the lender. I know there are certain age limits and other restrictions that will cause a penalty if you are not within the restrictions but that is outside of the lender. Either way, the best thing for you to do is to speak with a knowledgeable lender to see if you can get started on financing a new home as well as a IRA professional to help you with your situation. If you need additional assistance, feel free to reach out. Good luck!
  • February 26 2014
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From a lending standpoint yes this would be fine. If you are asking about tax impact you should ask your accountant or the IRA administrator that question. Factors such as her age would be relevant to obtaining the correct answer.
  • February 22 2014
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