[quote=AK]3. If you change jobs or get laid off, you may have to pay back the loan in a lump sum or pay $$$ in taxes and penalties.
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This happened to a good friend. She closed on a house and a few weeks later got laid off. Not only did she not have the mortgage money – she was scrambling to come up with the downpayment money she’d borrowed from her 401k – or else she’d have had to pay a 10% penalty.

Look really really hard at the job security issue. And make plans to repay if you have any plans to change jobs before it’s paid back. It definitely ties you to your employer.