Opinions and using 401K for down payment

Google htks
Jul 8 14 Comments

Lots of literature about this, but curious about opinions. Is it wise to take 50k loan? Would it be better to just take 10K no penalty, no interest? Or in some cases just take the penalty fees if matching is high enough?

comments

Want to comment? LOG IN or SIGN UP
TOP 14 Comments
  • Cox Automotive / Mgmt EMlN12
    Sounds like a great idea. Take money out of an higher interest, pre-tax, appreciating asset and plunge it into a lower interest, post-tax, depreciating liability.
    Jul 8 0
  • E*Trade / Finance cbEV72
    Lots of literature about what? About NOT using the pension to buy stuff? And you still want a blind advice from kids who dream to have salaries they claim to have? Baby Jesus, help us
    Jul 8 0
  • Amazon UrinGryjoy
    401K is bullshit. Buy a house. Better investment.
    Jul 9 2
    • Intel Act2016
      401k is what you make of it. You select where you invest. If you invest poorly you will probably get your result.
      Jul 9
    • Google htks
      OP
      So that's in most cases not true since with 401k (a) you get free money from your employer and (b) the us stock market has outperformed real estate over the last 40 years
      Jul 9
  • Intuit Cozc13
    I took the 50k loan. The interest you pay goes back into your 401k so it’s like paying yourself to borrow money.
    Jul 8 4
    • Amazon ofbsyckeba
      Is this true?
      Jul 9
    • Amazon ofbsyckeba
      You’re saying at the end of the day you aren’t paying any interest.
      Jul 9
    • Intel Act2016
      Yes. You pay yourself interest. While you pay yourself with taxed dollars.
      Jul 9
    • Yelp ghJhGj83
      Interest going back to your 401k is true. The paying back with after tax dollars is irrelevant though.

      https://thefinancebuff.com/401k-loan-double-taxation-myth.html

      The article says the interest is not double taxed, thought it would be for some reason.
      Jul 9
  • Envestnet jahfineh
    I took out 25k 5 years ago to buy a house in Redmond with an FHA loan just sold it made $400k ymmv
    Jul 8 0
  • If you absolutely need to take it from 401k then sure go for it and opt for the max repayment term ( even if the no: of years does not make practical sense still opt that payback option and you should be able to pull it off just fine).
    Jul 8 0
  • Intel Act2016
    NO. You put that 50k into your 401k with pre tax dollars. To pay that back you will do it with after tax income. So 75-80k.

    Plus it won’t make money for you while it is out of the 401k.
    Jul 8 0
  • Amazon yacht 🛥
    I would only use it as last resort
    Jul 8 0