Does an index fund count as diversifying?
iamelgringo: Someone double check my information on this, but I believe that you can take a 10,000 withdrawl penatly free for a first time home purchase.  The distribution will still be taxed, but there is no penalty.ConsumerReports.org usually has a pretty good list of low load, no load index and mutual funds that they suggest.  They are a non profit, and I'd been consistently pleased with their advice over the years.