Cape Coral Florida's Real Estate Guide

In these tough economic times, many people in Cape Coral are suffering financially and finding it harder to pay their bills, including their mortgages, everyday. Families are thinking out of the box and trying to find new ways to pay their bills and save their homes. Lately in the news, there has been mention that tapping into your 401K or IRA might be an option to access the funds needed to make your monthly payments. It is true that you may be able to draw on your 401K for needed monies, but is it really a good idea?

On the downside, by tapping into your 401K, you are taking money from your future. Saving for your retirement these days is essential to ensuring that you have a comfortable lifestyle during your golden years. Without that savings, you may face the tough question many seniors are facing today: how can I live on just social security? In addition to that, you will pay heavy withdrawal penalties along with income tax on the money.

On the upside, you can access your 401K through a loan. You will avoid the tax penalty that comes with withdrawal of the funds and get a fixed prime rate for the life of the loan. This can help you to preserve your credit and potentially your Cape Coral home. To start the process of acquring a 401K loan, talk your employer providing that they are the employer that originated your 401K to see if they process 401K loans. If you are no longer working for that employer, you will need to start a solo 401K account with a loan option. You will have access to the lesser of $50,000 or 50% of your solo 401K account. For this loan, there is no credit check and both the interest and principal payments are returned to your 401K account.

If you know without a doubt that you will be able to repay the loan, a 401K loan may be a good option for someone facing foreclosure. Keep in mind that if you are unsuccessful that you will lose not only your Cape Coral home, but your retirement savings. Talk to a financial advisor to see if accessing your 401K account to save your home is a good option for you.