Our series of questions from you continues.
I am a teacher and have been contributing to a 403b tax sheltered annuity (TSA) for nearly 20 years. I am interested in borrowing money from this account for a down-payment on a home. Is this possible, and if so, how does it work and what kind of terms should I expect? If not, can I transfer my 403b to another annuity that will allow me to borrow for this purpose?
Virtually all 403b plans provide for some type of loan provision, and will allow you to borrow your own money for fifteen to twenty years at an average cost of 2% for the purchase of a personal residence. Many plans also allow personal loans for any reason up to five years. Speak with your benefits administrator to double check the availability of such loan provisions and the terms to make sure that you are comfortable with them.
Also, we would probably recommend that you consider taking advantage of a 90-24 provision, which allows you to move (without penalties or taxes) a majority of your 403b / TSA to a newer and more competitive annuity that will offer more features and benefits.