Hello,
I have a roth IRA that I've contributed $10,500 to and currently has $12,000 in it. I would like to withdraw all of the money in it for a first time home purchase. I've been told that 10,500 of it can be withdrawn at any time without any penalty, but the remaining $1,500 would get the penalty (I think it's 10%). Since it is a first time home purchase, I have been told that I get an exception and don't have to pay the penalty on the $1,500. I was also told that I have to fill out an IRA 8606 form for distribution and and IRA 5329 form for the waiver of the penalty. I have two questions: 1) is this information correct? 2) does my mortgage lender need to do anything special to prove that I used the roth IRA for the home purchase, or can I just put it in my bank account and treat it as cash and still get the exception because I bought my first house around the time that I withdrew it? My lender's current plan is to use the money I have in savings only to verify that I can afford the down payment, but I have just enough cash for the down payment and want to use my IRA to replenish my bank account for a cushion. Will this still qualify me for the exception? Thank you!