Are we allowed to use our Roth IRA to pay off a Home Equity Line of Credit?
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One Response to “Are we allowed to use our Roth IRA to pay off a Home Equity Line of Credit?”
You can always take withdrawals from an IRA, but whether or not you pay penalties / taxes, is another issue.
You will pay the 10% penalty if the distribution is used to pay your equity line… the exception is only for first-time home purchase up to $10,000.
Additionally, you will pay ordinary income tax on the gains you have made on the contributions.
Hope that helps!
Ken Clark
Certified Financial Planner