Buying home - liquidate stock or do 401k loan?

Apr 22 29 Comments

I’m buying a home for my family.

I’m holding onto some MSFT and don’t have a lot in my checking account for the down payment.

Should I liquidate MSFT (long holds only) or get a loan from my 401k (max 50k borrow with 4.5% interest)?

Any suggestions? Serious replies please.

TC: 300k

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 TOP 29 Comments
  • Google
    Gooooooog

    Go to company page Google

    Gooooooog
    You need to payback your 401k loan within days you leave the company. Not worth the troubles to me
    Apr 22 4
  • Meta
    apesstrong

    Go to company page Meta

    apesstrong
    Pledged asset line
    Apr 22 5
    • OP
      Thx for the idea apesstrong. I will check out the pledged asset line.

      Do you have any recommendations on servicers for PAL? I see Schwab has some for around 4.65% interest
      Apr 22
    • Meta
      apesstrong

      Go to company page Meta

      apesstrong
      If at any point your loan is higher than 70% of your assets they will give 30 days or so to fix it. Otherwise they will sell till it’s fixed.

      For Schwab you need to call them and negotiate.
      Apr 22
  • IBM
    MangoLasi

    Go to company page IBM

    MangoLasi
    1. Transfer Microsoft stock to M1 finance
    2. Take out a margin loan against Microsoft stock at 2.25% APY to pay mortgage down payment
    Apr 22 2
    • OP
      I’m taking a look at M1 website. Seems promising! Have you done this method? If so, what did you think? Thx for suggestion
      Apr 22
    • Amazon
      TVID30

      Go to company page Amazon

      TVID30
      M1 loans are variable and track against fed funds rate which we know are going up. Still in short term better than paying long term capital gains on MSFT but depends on payback timeline. Just do your budget with 4-5% APY and you should be OK
      Apr 22
  • Amazon / Eng
    HedyLamar

    Go to company page Amazon Eng

    PRE
    Microsoft, Meta
     HedyLamar
    I am in the same boat. Trying to buy a house. My majority stocks r in Microsoft which I don't want to sell. Plus 401k is just stuck I did some maths for instance 27k per year contribution to Microsoft for 3 years and the final result is pretty much what I contributed hardly 5-6k appreciated in 3 years barely enough to cover the penalty if I withdraw. Now, I feel 401k is a ponzi scheme on one hand people r leaving jobs then how will we get paid our fair share in 35 years. It's questionable. Plus I will join Microsoft pretty soon. So, I wont be able to withdraw once I am back there. I didn't think about taking a lone against 401k. Conventional loan is more than enough for me. Let me know what u decide
    Apr 22 10
    • Amazon / Eng
      HedyLamar

      Go to company page Amazon Eng

      PRE
      Microsoft, Meta
       HedyLamar
      And I am definitely sure that you cannot cash out if you are still employed. A simple google search would have shown u that or try your infidelity portal. The moment you click on amazon it will say since you work here you can't withdraw. I will give you the same advice. Do your maths again. Aso, 401k contribution is decided by the company. It's withdrawal/penalty is decided by the government.
      Apr 23
    • Amazon / Eng
      HedyLamar

      Go to company page Amazon Eng

      PRE
      Microsoft, Meta
       HedyLamar
      One more thing, if you are so confident do you mind sharding your portfolio. Mine is 88% stock, 9% bond investment. My YTD return is -10%. Till now I have contributed 17k via amazon + amazon has matched about 3k. My available balance as of today morning is 18k. First of all I can't withdraw because I am still employed at Amazon. Even I could withdraw according to your universe, where one can withdraw even while working at the sponsor company. I will have to pay 25% tax + 10% penalty. Even if we go by your logic, that one year return is 6%, inflation is 8.5% (this is reported number, actual inflation might be higher than this). Then I have no clue how does it make sense. In microsoft it still makes sense because they match 50%. But okay I don't want to drag this any further. It if it works for you, it just works for you. It is just that my financial goals are different.
      Apr 23
  • Meta
    eLH04

    Go to company page Meta

    eLH04
    Is see people suggesting a margin loan. Why does that help? Doesn’t mortgage underwriting consider all your debt?
    Apr 22 1