[quote=asianautica]I could be wrong, but I think the $ you borrow will be taxed twice. You’re paying back with after tax $. When you withdraw later, it’ll be taxed again. So, unless I’m wrong or you’re in the 0% tax bracket, it doesn’t make sense to borrow from your 401k to refi. Also, if you quit or get fired, you need to pay that money back immediately. The $ in your 401k is protected from bankruptcy. They can’t go after that $. However, they can go after your house if you filed for bankruptcy.[/quote]
I think that’s absolutely correct. One extra angle of consideration is that you don’t want to put all your eggs in a single basket. So unless you have a huge 401K saving, you don’t want to take it out and put it into a house altogether. After all, house is a depreciating asset right now and stock market could turn around at any time.
