Raiding the 401K is generally not a good idea. With taxes and early withdraw penalty you wouldn’t even clear you 100k out of 130K. 401K loans are also generally a bad idea, with compounding effects you stand to lose out years down the road. Are you counting on a company pension, social security to keep you solvent in your golden years? I personally don’t want to be eating cat food in a run down 1 BR apt with loud neighbors upstairs keeping me up at night. At 29, you have done a great job at retirement savings. I don’t know too many 29yr olds who have a decent retirement fund started.
Paying all cash (or very large down payment) will have its benefits 2-3 years down the road. Who knows where interest rates will be. We are still near historic lows. As the cost of borrowing (interest rates) go up and credit standards tighten, housing pricing will likely take a further hit.
There is nothing wrong with having a mortgage. There are good mortgages and bad. Just get one that is affordable and un-creative. Personally I don’t like interest rate risk on mortgages so I prefer a 30 year fixed. Last house I had was 30 year fixed, but I only kept it for 6 years. In hindsight, a 7 year ARM may have been better idea, but again I don’t like interest rate risk. We may be seeing large rate increases and bouts of severe inflation in coming years. Those who locked in low rates with 30 year fixed will be happy they did. Those with ARMS will be waiting with dread for their resets, unable to refinance into 30 yr fixed due to drops in their house value.
