Are there pros/cons of one over the other? Also, can both husband and wife take a loan each from their respective 401k accounts?
401k loans usually have higher interest rates then a traditional loan. Although, you're paying back interest to yourself. Just something to keep in mind. In as strong as a market as we're currently in, I'd be hesitant to touch any current investments to come up with a down payment. I'd probably go with an additional mortgage loan like a HELOC and keep my investments... with current rates, money is so cheap to borrow right now.
Thanks for the suggestions!
Don't just go blindly any route. Calculate cost for both options. You will need to pay tax if you sell stock and you lose gains in 401k. Also touching 401k is bad is bullshit advice
It is a decent advice for someone who cannot decide between the above options. If the OP is savvy in investing they wouldn’t be asking this question.
You don't know if OP is savvy or not. He might be talking about RSU
Neither. You can’t afford the home.
Uh why do you say that? OP could be buying a 1m home and gave 5m in stock.
Sell the stocks, don’t touch 401k
You'll have to pay back your 401k with post tax dollars meaning your terminal balance will be taxed twice: the second time being when you start drawing contributions. It's very tax inefficient
Do you need to pay capital gain tax if you sell investments? Consider taking out a margin loan against your investments and pay it back quickly after you buy your house.
Stocks over 401k, always.
401k loan can be a good deal. Those massive capital gains in your 401k aren’t taxable when you make a withdrawal in the form of a loan which can save high earners a bit. Yes you both can take a loan so it could be a great way to tap into another 100k. As long as you pay it back, live within your means, and have a 401k plan that lets you setup auto-pay once you leave the company there is no downside. Most people’s internet advice on this topic isn’t rational for competent investors
At risk of stating the obvious, you can use the 401k as reserves instead of taking a 401k loan out for down payment. You need 6-12 months of reserve money anyways
Don’t touch your 401k. Treat it as something you never can access until retirement or a hardship.
This Also Think of it our jobs are at will so in case if you are let go tomorrow you need to payoff the 401k loans in next 1-2 months