401K

What is the 401k in Mortgage Loans?

A retirement investment plan created by the U.S. Congress, which has become the replacement pension program of choice for modern American businesses.

Employees are allowed to set aside a portion of their pre-tax income into tax-deferred 401K accounts. They will not have to pay income taxes until they withdraw funds after retirement. The 401K fund is normally managed by licensed financial institutions.

Most corporate employers also contribute to their employees’ 401K accounts, which are portable, should the employee decide to transfer to a different company or employment. Although there are penalties for early withdrawals, homebuyers are also allowed to borrow against their 401K. Many do so to pay for the down payment.

For more information, please see also the following entries:

  • :Assets:
  • :D own Payment:
  • :Income Tax:
  • :Mortgage Loan:


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