Can I Move 401k to IRA and take Loan for First Time Home Purchase?

First I鈥檒l have to give you some history. Over my career, I have frequently moved to different companies and I have moved my 401k several times. I now have 2 401k plans and a simple IRA plan. I have just started working in a new position but at none of the companies. I have approximately $50,000 in one 401k, and $8,000 in the other two. I don't own a home and I am now looking to buy my first one. My girlfriend has a lot of equity from the sale of her house. We are both 40 years old.


I have only $2,000 in available cash in the bank.


We have recently moved to a much more affordable region and I can now afford a mortgage but won't have savings for deposit for another 6-10 months or so. I would like to go in equally with my girlfriend or figure a way where we can share in equity. So I have several questions:


1. What's a good method that my girlfriend and I can work fairly with her greater equity?





Like most people I am not thrilled by my 401k returns lately. I would like to move them to a self-directed IRA where I have more choices on investments. I am reading that index funds are best to minimize fees but I'd also like to be able to choose individual stocks and funds.


2. Where can I do this? Will I lose out on 401k advantages?





I have also been thinking of taking a loan on my 401k or using moneys for first time buyer - I can't do this since I no longer work for the companies.





3. Can I do this in an IRA? In other words can I transfer my money to an IRA and then take loan from there?


4. Will a loan officer give us a loan if I have $15,000 from a 401k (IRA) first time buyer loan and only $5,000 cash funds?





Thanks for your help|||A couple of points in response:





You can take your old 401ks from previous employers and roll them over into an IRA. The IRA can be at a financial institution that allows individual stocks, ETFs, funds, etc., which considerably broadens your choices. (For example, you can set it up at a broker like T.D. Ameritrade.)





Index funds give you the broadest diversification with the lowest fees. Individual stocks give you the least diversification. WIth only $58k I'd just leave it in indexes or in broad ETFs, but if you want to take a flyer on a stock or two, try to experiment first with a small percentage of that money.





You may be able to arrange cash from your IRA -- there are some special rules for first-time home buyers -- but since you asked, I'd recommend either of these instead: (1) Just wait and accumulate more cash. It'll be good practice for saving in the future. (2) Since your girlfriend has spare cash, split the down payment with her by signing a real official loan note to her for half, including a reasonable interest rate, and then also split the payments. And -- do I need to say this? -- pay the damn note back on time. That way you two are really 50-50 on the investment and there won't be any odd math or disputes.|||1. You and your girl friend need a written document stating what your arrangements are and I would strongly recommend that you retain a lawyer to draw it up. They are a lot more expensive for resolving disputes than for documenting agreements. You could agree that she owns a specific percent of the property and agrees to let you buy your way to 50% at an agreed price if you agree to split house payments and costs from the beginning. The percent could be based on the ratio of you share of the down payment and the price could the be something a little more (for interest) than enough to make the shares even.





2. You can convert your 401K plans to self directed or adviser managed IRA(s). I strongly recommend you stay with no load mutual funds in your IRAs and fool around with a few stocks when you can afford to do that outside of your retirement money.





3. You can do it in and IRA through a wide variety of brokers and investment managers including Fidelity, Schwab, Ameritrade, etc. Check them out online.





4. The loan officer won't care where your down payment came from as long as you did not borrow it from some one else who won't be on the mortgage. But I strongly recommend that you leave your retirement money alone.|||Here are many first time home buyers programs available. You may start by calling the city Housing Office in your city or the county housing office%26lt;!--in the county in which you reside.If these offices don't have the programs you are seeking they will be able to tell you what agency in their jurisdiction has them.





http://best-loans.awardspace.com/homebuyerprogram.htm





Once you have located the first time home buyers program and who operate it, that agency normally have a list of lenders, banks--%26gt;mortgage brokers or institutions that are authorize to administer the program. These agencies are normally listed on a pamphlet.|||My advice..........keep your hands off you 401 unless it will save your life.......Your 40 years old........how much do you have for your retirement.......you will need a million.......are you on track or on the way to the food pantry @65?