How shall we buy our first house?

[scaredyclassic]

Actually forget it. You can’t beat the system.

Maybe the renting thing … Just do that

[recordsclerk]

You will still have to pay taxes when you take distributions in retirement. It may be at a lower tax rate, but the taxes have to be paid. You would only lose the $5445 (33% Tax bracket) tax free advantage investment monies. I don’t think that is totally apples to apples. To run the actual #’s we would have to see how well the $5445 performs. To prove this theory we would also have to take the money saved on PMI and invest it in an after tax investment. BTW this is way over my head.

[recordsclerk]

You will still have to pay taxes when you take distributions in retirement. It may be at a lower tax rate, but the taxes have to be paid. You would only lose the $5445 (33% Tax bracket) tax free advantage investment monies. I don’t think that is totally apples to apples. To run the actual #’s we would have to see how well the $5445 performs. To prove this theory we would also have to take the money saved on PMI and invest it in an after tax investment. BTW this is way over my head.

[recordsclerk]

You will still have to pay taxes when you take distributions in retirement. It may be at a lower tax rate, but the taxes have to be paid. You would only lose the $5445 (33% Tax bracket) tax free advantage investment monies. I don’t think that is totally apples to apples. To run the actual #’s we would have to see how well the $5445 performs. To prove this theory we would also have to take the money saved on PMI and invest it in an after tax investment. BTW this is way over my head.

[recordsclerk]

You will still have to pay taxes when you take distributions in retirement. It may be at a lower tax rate, but the taxes have to be paid. You would only lose the $5445 (33% Tax bracket) tax free advantage investment monies. I don’t think that is totally apples to apples. To run the actual #’s we would have to see how well the $5445 performs. To prove this theory we would also have to take the money saved on PMI and invest it in an after tax investment. BTW this is way over my head.

[recordsclerk]

You will still have to pay taxes when you take distributions in retirement. It may be at a lower tax rate, but the taxes have to be paid. You would only lose the $5445 (33% Tax bracket) tax free advantage investment monies. I don’t think that is totally apples to apples. To run the actual #’s we would have to see how well the $5445 performs. To prove this theory we would also have to take the money saved on PMI and invest it in an after tax investment. BTW this is way over my head.

[UCguy]

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.

[UCguy]

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.

[UCguy]

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.

[UCguy]

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.

[UCguy]

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.

[UCGal]

[quote=UCguy]
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.[/quote]

My understanding is it’s a 10% penalty on the unpaid portion (regardless of whether it was your contribution, company matching, or gains on either of those… it’s all one big blob.)

And you owe income tax on the unpaid portion – in addition to that 10% penalty. So factor that in.

[UCGal]

[quote=UCguy]
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.[/quote]

My understanding is it’s a 10% penalty on the unpaid portion (regardless of whether it was your contribution, company matching, or gains on either of those… it’s all one big blob.)

And you owe income tax on the unpaid portion – in addition to that 10% penalty. So factor that in.

[UCGal]

[quote=UCguy]
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.[/quote]

My understanding is it’s a 10% penalty on the unpaid portion (regardless of whether it was your contribution, company matching, or gains on either of those… it’s all one big blob.)

And you owe income tax on the unpaid portion – in addition to that 10% penalty. So factor that in.

[UCGal]

[quote=UCguy]
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.[/quote]

My understanding is it’s a 10% penalty on the unpaid portion (regardless of whether it was your contribution, company matching, or gains on either of those… it’s all one big blob.)

And you owe income tax on the unpaid portion – in addition to that 10% penalty. So factor that in.

[Author]

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