For you young fellows

[Guest Rick O'Shay]

For you younger fellows wanting to buy a house while prices and interest rates are down, and finding myself in the same situation, I recently discovered an interesting tidbit that will potentially help in this situation.

Disclaimer: I do not have all the details and may be missing something, but I intend to look closer into it.

If you have a conventional IRA or have a Roth IRA at least five years old, you can remove up to $10k from it for a down payment on a house without having to pay a penalty. You do however have to pay taxes on any capital gains. The way to save yourself a high tax burden will be to close on the house after the New Year, and any tax write-offs you accrue from interest payments will help offset the capital gains due at the end of the year.

You can roll 401k funds over into the IRA (non-employer contributions unless you are vested) and use them also.

Since discovering this I have created a new IRA, have plunked a chunk of my cash reserves into it, and am rolling funds from a previous employer's 401k, and some from my current one into it. I set this up with one of those online Stock Trading companies (like Scottrade and E-Trade) and am buying energy sector stocks (FPL, SO, EXC), and Google and Microsoft (GOOG & MSFT), all of which should do fairly well throughout the rest of the year, with the possible exception of EXC. Google and Microsoft are poised to gain some in equity, and the energy stocks I mentioned are in the Nuclear business, among other things, and will do well when oil prices go up again this summer.

I am posting this because I am pretty excited about discovering this, and wanted to share with anybody who might be in a similar position.

My $0.02