Monday, December 12, 2011

What type of account should I use when saving for a house?

I've decided to save for my first house over the next couple years and wondered what type of account I should keep the money in. I have a Roth IRA that I contribute $75 to each month. My thought was to use that account and max it out each year. Then if I understand correctly I can take that money out without penalty for a house. Does this sound like the best idea?|||try an investment account or mutual funds, insurance funds etc|||The ROTH IRA is more specific for retirement savings rather than home purchase savings. And do remember that you monthly contribution is after tax money.





This is what I would do ... set up another savings account at your credit union or bank; ask them to put housing in the description/comment line. And then on a bi weekly or monthly basis, ask them to automatically sweet $100 to that account. In 2 years you will have about $2600 saved. Of course this is not a lot of money for downpayment, but it will pay some of your closing costs. You could do an FHA loan which has a 3.5% downpayment requirement.





Buena suerte!|||Use a Savings account. They're the best. Ask your bank about themAlso, this may sound like quite a minor issue; but they're NEVER in risk of fraud. So you never have to worry about your money there.|||An IRA is NOT appropriate for that. IRAs are for long-term retirement investings. Stick with cash instruments like savings accounts, CDs or money-market funds.

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