Question : Is it better to use home equity or retirement to temporarily make ends meet?
We are married in our 40's with a baby. I am stay at home mom and my husband was laid off. We have two homes and no debt aside from mortgages. Should we use our home equity or cash in retirement to make ends meet until we have another income?
- asked by Kristen A
All Answers:
Answer #1
Do not cash in retirement, unless it's in a RothIRA, and then, only take out what you contributed. Otherwise you will have to pay taxes PLUS a 10%penalty on it. After it's all said and done,you're only going to get around 55 cents on thedollar for the money you take out of yourretirement.
- answered by Nathan K
Answer #2
Unless you already have an established home equityline of credit, your family income situation maynot allow you to acquire a line of credit. Andgiven the current real estate market, yourmortgages may already have you "upside-down" - youowe more than the house is worth - on the house,which will also prevent you from being approvedfor a line of credit.If your only choice is usingthe retirement, you will pay a penalty and owetaxes if not paid back on time, and that will makeyour financial situation even worse.Better tothink about hubby getting some, any, work, or yougoing to work, or both.
- answered by thylawyer
Answer #3
Sell the one home to get rid of the mortgage.
- answered by Steve R
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measure and fulfill your financial needs
