we are first time home buyers. planning to take $50k loan from 401k account to make a downpayment. pros and cons? Does Microsoft suspend new contributions until the loan is paid completely?
Nothing changes with company contributions. And the interest you pay will go into to your 401k funds ..so it's good.
Sounds like an ideal option. Do you know how manu ueats we have to repay? And what happens of we leave company before paying off the loan?
One caveat is - you will be paying into a pretax pool with post tax money
Some banks allow 15% down payment with no PMI so you don’t have to dip into your 401k. Can alway recast later to lower your payment and pay down your principal. Citibank does this for example.
If you can handle two payments (401k+mortgage) go for it It's great because the interest you'd be paying goes into your 401k Though need to consider the $ you take out won't be "working for you" (not invested) I heard if you leave the firm any balance on the loan is due immediately and in full (I'm sure hr can confirm or debunk this)
A downside is the interest you’re paying on the loan back into your 401k is significantly less then what you’d earn on that money if it was left in your 401k. compounding interest over the next 30 some odd years and all...it’s not as “good” deal as it’s sounds on the surface.
Dude, he's taking a 50k loan...how you arrive at 30 yr lost investment opportunity? lol
Dude, that 50k earns a hell of a lot more sitting in the 401k versus the interest tacked on when paying his account back. Every year that divide gets larger...take the loss in earned interest for not having that 50k in the 401k and stretch it out with compounding interest over the next 30 years assuming he is young. That gets to be a very expensive loan. Hope your not on the finance side of JP...
I have done the same thing. Not a big deal. Nothing happens to your contributions