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Greetings Fools!

My husband and I are are on the verge of purchasing our first home. In 1998 we converted all of our IRA savings into Roth IRAs. We have over a little over $50,000 in these accounts, are both 30 and have other retirement plans.

As I understand it, we can each take $10,000 out of these accounts for a first time home purchase without paying the 10% early withdraw penalty. It also seems (again according to my interpretation) that because these Roth IRAs were converted from tradiational IRAs and the taxes have already been paid (we paid one lump sum) that we do not have to pay any additional tax for withdrawing this money.

This seems too good to be true (like many aspects of the Roth IRA). But it seems that this will be a cheaper way of financing the downpayment rather than taking money out of our mutual funds and paying the tax on those investments.

So, my question is: can i take the $10,000 out of my converted Roth and use the money for a down payment on a first home and avoid the 10% early withdraw penalty as well as the tax?

Thanking any fool out there.

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