Using Roth/Traditional IRA as a down payment & Other Newbie Tips

[Carol Reyes]

Hi everyone! I'm interested in learning more about using funds from a Traditional IRA or a Roth IRA as a down payment for a 3-bedroom home or apartment. We are still unsure of the location, as we will be purchasing when I start my graduate degree (and we're awaiting news from universities) but options are Boston, New Haven, Hanover, Palo Alto, Berkeley or Washington, D.C. I would be purchasing it with my partner, and we are both first-time buyers.

I read online that in order to withdraw funds from a Roth IRA for this purpose, the account needs to have been open for five years. We both meet this requirements and have our accounts in Betterment. That said, we want to move them to Vanguard. If we make that move, would the accounts be "new," meaning that we would no longer meet the 5-year requirement?

If anyone has any tips for first-time buyers with essentially no clue what they are doing, please send them my way! Anything related to purchasing with small amounts of money, how to get better rates/pay lowest down payment, best types of mortgages and loans to get, how to reduce capital gains taxes, etc., would be wonderful. 

We've started reading a few of Brandon Turner's books and are Mindy & Scott fanatics, but we have much to learn! 

-Carol