My husband and I (26f) (24m) own a home currently worth about 180,000 and owe about 100,000 on it. It was our first house and was fixer upper that’s not in the best side of town and we will want to be starting a family soon; our plan was never to be here for very long. We have contacted our realtor looking to sell and buy a new place outside of the city with a few acres.
We have estimated seller net forms from our agent that would get us about 60k from the sale of our current home.
We found a property that we LOVE, just shy of 300k, (our combined income is 160,000+inconsistent bonuses). The only issue is we have to stay in our current house for two full years to avoid capital gains taxes, and we have three more months till then. We also don’t have enough saved for closing costs + taxes of a new property without proceeds from the sale of ours, and we are in a pretty hot market where an offer with a contingency of a home sale would complicate things.
The new house that we love is a fixer upper too, but in a rapidly appreciating area, and we love a good projects.
My question is, I’ve heard it’s not a great idea to borrow from your retirement accounts, but would it be reasonable in this case to borrow enough for a down payment and closing costs, and then pay it back immediately from the sale of our house in May-June? / can you pay these loans back immediately or is there a penalty? The only things I’ve been so far is a loan length of 61-120 months but we would only want like a 4 month loan.
If we bought this place now, we’d have a few months of Reno time before moving in, and I doubt this place will still be available when our two full years is up…. Yes more places will pop up…. But who know I guess??
original posted by Every_Ad3540 to r/personalfinance on Wed, 28 Feb 2024 00:16:26 GMT.