Borrowing from 401K vs. PMI

[joec]

Sheldon explained the point on having to repay the loan immediately or face early withdrawal penalties and income taxes. That is the biggest risk with this option I feel.

One thing not mentioned yet is that your loan isn’t on your credit report, at least it wasn’t in my case…

In the short term, if your job is stable, this is probably one of the lower cost of accessing a large amount of funds.

There’s also the 60 day rollover option as well with IRAs.

[AK]

Ah yes, looks like the PMI deduction is getting extended for another year.

[AK]

Ah yes, looks like the PMI deduction is getting extended for another year.

[AK]

Ah yes, looks like the PMI deduction is getting extended for another year.

[AK]

Ah yes, looks like the PMI deduction is getting extended for another year.

[AK]

Ah yes, looks like the PMI deduction is getting extended for another year.

[UCGal]

[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.
[/quote]
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.

[UCGal]

[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.
[/quote]
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.

[UCGal]

[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.
[/quote]
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.

[UCGal]

[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.
[/quote]
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.

[UCGal]

[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.
[/quote]
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.

[Effective Demand]

Normally, I would regard retirement accounts as sacred. But the amount needed relative to your savings isn’t that much. You would have to calculate the opportunity cost (return you would have gotten if the money remained in the account) vs PMI cost minus deduction (PMI deduction might not apply to you due to income restriction).

[Effective Demand]

Normally, I would regard retirement accounts as sacred. But the amount needed relative to your savings isn’t that much. You would have to calculate the opportunity cost (return you would have gotten if the money remained in the account) vs PMI cost minus deduction (PMI deduction might not apply to you due to income restriction).

[Effective Demand]

Normally, I would regard retirement accounts as sacred. But the amount needed relative to your savings isn’t that much. You would have to calculate the opportunity cost (return you would have gotten if the money remained in the account) vs PMI cost minus deduction (PMI deduction might not apply to you due to income restriction).

[Effective Demand]

Normally, I would regard retirement accounts as sacred. But the amount needed relative to your savings isn’t that much. You would have to calculate the opportunity cost (return you would have gotten if the money remained in the account) vs PMI cost minus deduction (PMI deduction might not apply to you due to income restriction).

[Author]

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