Wow! lots of good ideas. Thanks guys and gals. Very interesting. I have to crunch a lot of numbers about money saved on PMI vs taxes on money not put in 401k and discuss options with my wife. She’s having a very strong, delayed nesting instinct.

The problem is not just getting 20% down which we could accomplish if we try hard in 2-3 years, but the extra cash reserves.

I hate to piss away money on PMI too. The risk with 401k loans is the forced early repayment thing though. I hear you UCGal.

Here is a question. Let’s say I borrow 50K and all of a sudden I have to repay and can’t (at least not totally) – so I take early distribution and taxes and penalties. How much is are the penalties ? 5K (10%)? Keep in mind that one third of that money came from the company matching (50 cents for my 1 $).
By that time I would probably pay off some of it, and probably still pay some of it, and after I am forcred to take the early distribution, I don’t have to pay my 401k loan.