Foreclosure has become a crisis in America and many homeowners are desperately trying to find solutions to prevent foreclosure. More and more of them, if they haven’t already, are thinking about tapping into their 401K’s or IRA’s to avoid foreclosure.
When the housing market was up and the interest rates were at a historical low, there was a refinance frenzy taking place. Most of these mortgages were refinanced with an adjustable rate mortgage (ARM) and when there mortgage increased, homeowners were unable to pay the additional amount. When the housing market plummeted, not only did people lose jobs, but many homeowners could not even sell their homes to get out of foreclosure.
No matter what the situation, if you are one of the many homeowners facing foreclosure and your are thinking about using retirement savings, check out these “pros” and “cons” on using your 401K or IRA to avoid foreclosure.