Comments on: Reader questions answered: Saving for a Condo http://thebudgetingbabe.com/2008/03/28/reader-questions-answered-saving-for-a-condo/ A personal finance blog for career minded women with small budgets and big dreams. Sun, 05 Aug 2012 15:47:43 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Phil http://thebudgetingbabe.com/2008/03/28/reader-questions-answered-saving-for-a-condo/#comment-2868 Phil Thu, 12 Jun 2008 16:10:00 +0000 http://thebudgetingbabe.com/?p=382#comment-2868 for what it's worth, i'm studying to be a <a HREF="http://securitiesexam.com/" REL="nofollow" rel="nofollow">financial planner</a> and i've got an ING account and an IRA. ING has been lowering their interest rates (which makes sense given the current financial climate), but they're still pretty good. ING type accounts seem like the safest way to do it these days, again because of the uncertainty in the economy. for what it’s worth, i’m studying to be a financial planner and i’ve got an ING account and an IRA. ING has been lowering their interest rates (which makes sense given the current financial climate), but they’re still pretty good. ING type accounts seem like the safest way to do it these days, again because of the uncertainty in the economy.

]]> By: savvy http://thebudgetingbabe.com/2008/03/28/reader-questions-answered-saving-for-a-condo/#comment-2632 savvy Fri, 28 Mar 2008 22:16:00 +0000 http://thebudgetingbabe.com/?p=382#comment-2632 You can't borrow from an IRA. You can take a one-time withdrawal (up to $10K) without penalty to purchase a home. There is no putting it back. You're limited to $5K/yr (currently) and you're not allowed to try to make it up.<br/><br/>That said, I would not invest money needed for a down payment. There is always the risk of losing some of the funds. If you already have an emergency fund in place, your best bet is probably CDs. That way there's no risk and you've also locked it away from yourself so you can't spend it :-) If you don't have an e-fund, you may want to consider a MMA so that the funds are liquid in case you need to access them. You can’t borrow from an IRA. You can take a one-time withdrawal (up to $10K) without penalty to purchase a home. There is no putting it back. You’re limited to $5K/yr (currently) and you’re not allowed to try to make it up.

That said, I would not invest money needed for a down payment. There is always the risk of losing some of the funds. If you already have an emergency fund in place, your best bet is probably CDs. That way there’s no risk and you’ve also locked it away from yourself so you can’t spend it :-) If you don’t have an e-fund, you may want to consider a MMA so that the funds are liquid in case you need to access them.

]]> By: Nilsa S. http://thebudgetingbabe.com/2008/03/28/reader-questions-answered-saving-for-a-condo/#comment-2630 Nilsa S. Fri, 28 Mar 2008 19:59:00 +0000 http://thebudgetingbabe.com/?p=382#comment-2630 Hi, by way of your friend Chandra!<br/><br/>When I bought my first condo ... I was still living paycheck to paycheck. If you can believe it. But, with a little help from my parents and a really great market (interest rates were at their lowest), I still managed to buy.<br/><br/>These days, I'm not sure what I'd do. I'm putting my place on the market in the next week or so and I can only hope the proceeds I make from the sale (minus all those darn fees) can be turned into a nice little down payment.<br/><br/>Fingers crossed! Hi, by way of your friend Chandra!

When I bought my first condo … I was still living paycheck to paycheck. If you can believe it. But, with a little help from my parents and a really great market (interest rates were at their lowest), I still managed to buy.

These days, I’m not sure what I’d do. I’m putting my place on the market in the next week or so and I can only hope the proceeds I make from the sale (minus all those darn fees) can be turned into a nice little down payment.

Fingers crossed!

]]> By: stackingpennies http://thebudgetingbabe.com/2008/03/28/reader-questions-answered-saving-for-a-condo/#comment-2629 stackingpennies Fri, 28 Mar 2008 19:58:00 +0000 http://thebudgetingbabe.com/?p=382#comment-2629 Do you have a Roth IRA? Many people recommend them in addition to a 401k for tax diversification. I don't think it is usually necessary to consult a professional to see if you are eligible. Just look it up on the IRS website, it is quite straightforward.<br/><br/>Anyway, the way I read the advice was not to borrow against your Roth, but rather to take the money from it outright, never paying it back. <br/><br/>This might be sound advice if a person wasn't using your Roth for retirement savings anyway. You could invest in a very stable fund (vanguard prime money market) which is quite similar to a high yield savings account, but you wouldn't have to pay taxes on that 3% (or whatever the rate is).<br/><br/>There might be some limit about the age of the account though, not sure how that stipulation he mentioned works. Do you have a Roth IRA? Many people recommend them in addition to a 401k for tax diversification. I don’t think it is usually necessary to consult a professional to see if you are eligible. Just look it up on the IRS website, it is quite straightforward.

Anyway, the way I read the advice was not to borrow against your Roth, but rather to take the money from it outright, never paying it back.

This might be sound advice if a person wasn’t using your Roth for retirement savings anyway. You could invest in a very stable fund (vanguard prime money market) which is quite similar to a high yield savings account, but you wouldn’t have to pay taxes on that 3% (or whatever the rate is).

There might be some limit about the age of the account though, not sure how that stipulation he mentioned works.

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