Solo 401k funds: Making Mortgage Payments
What to do if you need to use your Solo 401k funds to pay for your mortgage? Plan owners need to know that they cannot use their Solo 401k funds for personal purposes, but are allowed to borrow from the 401k. Watch this Solo 401k Quick Tip video where Sense Financial explains the how Solo 401k funds can help the plan owner pay off their mortgage.
Solo 401 Funds and Mortgage Payments
As the plan owner, you cannot use funds from your Solo401k to purchase a house for personal use. You cannot sell the property to your Solo401k, or use your Solo401k as collateral for a loan. What you can do is to take out a participant loan from your Solo401k plan and use it to pay off your mortgage. The loan must be paid back using amortized payments over period of 5 years, but you’ll be paying back interest to your own account, instead of the bank.