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Real Estate
Eileen M. Day REALTOR
401 (k) DOWNPAYMENT
SOURCE
If you're lucky enough to work for a company offering a 401 (k) savings plan, don't overlook the plan as a downpayment loan source. Usually, if you borrow from a 401(k) to purchase a principal residence, you'll have ten years to repay the plan. The interest on the loan can be as much as two points below the prime rate.
When you take a loan from your 401(k) plan, you're actually paying yourself when you repay the loan. Another plus Is that, at present, there are no early withdrawal penalties applicable on a 401 (k) loan, as there would be If you withdrew the money from an 'IRA'. Normally, you'll be required to pay a nominal loan application fee. sometimes as little as $25.
Keep In mind, that because a 401 (k) plan Is funded with pre-tax dollars that are tax sheltered until you begin making withdrawals (usually at retirement), you won't be able to deduct the Interest on the loan. However, these Interest dollars are going Into your pocket!
If there Is anything we can do to help you In the field of real estate please stop in at EILEEN M. DAY. Realtor, the Clopton House. Washington. Va., 22747. Phone 875-5033. We re here to help. _
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