Pay your mortgage with your retirement fund - WALB.com, Albany News, Weather, Sports

Pay your mortgage with your retirement fund

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You may soon be able to pay your mortgage using your retirement fund.

Senator Johnny Isakson and Representative Tom Graves introduced a bill in Congress that would allow you to withdraw money from a qualified retirement plan, penalty-free, to make mortgage payments toward your primary residence.

You couldn't spend more $50,000 or half the present value of the 401-k account.

One financial advisor suggests you think twice before dipping into your retirement money.

"For a lot of people if you make it real easy for them to all of a sudden go in and grab it, they will do it, next thing you know it may help give a little bit of relief right now, but it could create a problem down the road," says Vic Sullivan, Wells Fargo Investments VP/ Financial Advisor.

Deferred income tax would still be due on the withdrawals, and the money would need to be used to make mortgage payments within 120 days of withdrawal.

Isakson and Graves say the plan will reduce foreclosures and keep more Americans in their homes.

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