By Jeff Adolph
Investing for Your Future
If you are thinking of buying a rental property and taking advantage of the low interest rates and home prices, but don't have enough money for a down payment, then you may be able to use your IRA assets.
What many people don't know about their IRA assets is that the IRS will allow you to take out a 'non-recourse' loan, and use your retirement savings as a down payment for real estate. This is providing that the income generated is a 'positive cash flow', and that the borrower is able to pay a 30% down payment using their IRA.
However, the best news to date, is that unlike other mortgages banks are eager to provide IRA non-recourse loans as 'IRA borrowers' have a stake to protect -- their retirement funds -- and this means that they are less likely to default on their mortgage repayments. Plus, home prices are reduced, and with a minimum of a 30% deposit already paid, banks are assured of regaining their investment capital should the property need to be taken, and re-sold to recoup their costs.
Using your IRA funds to buy an investment property also means that you can buy a property outright, or even pay a 30% down payment on several properties, so that you can take advantage of historically low borrowing costs and potentially retire wealthy.
Article Source: Pummer, Chris (2009) Leveraging IRAs with Mortgages; available online at www.marketwatch.com
Image Source: Microsoft Clipart
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