Comments on: Should I Borrow From 401(k) For Down Payment http://www.azmortgageguru.com/should-i-borrow-from-401k-for-down-payment/ Home Mortgage Expert in Phoenix, Arizona Thu, 04 Dec 2008 00:36:33 +0000 http://wordpress.org/?v=2.6.1 By: Wade Young http://www.azmortgageguru.com/should-i-borrow-from-401k-for-down-payment/#comment-2066 Wade Young Thu, 24 Apr 2008 20:14:32 +0000 http://www.azmortgageguru.com/should-i-borrow-from-401k-for-down-payment/#comment-2066 I think there are situations where borrowing from your 401k plan is a wise thing to do, if you can't get the down payment funds elsewhere. If you will pay it back within 5 years, it's something to consider. Also, I believe the cap is $50k. I think there are situations where borrowing from your 401k plan is a wise thing to do, if you can’t get the down payment funds elsewhere. If you will pay it back within 5 years, it’s something to consider. Also, I believe the cap is $50k.

]]> By: Ginger Wilcox http://www.azmortgageguru.com/should-i-borrow-from-401k-for-down-payment/#comment-2040 Ginger Wilcox Mon, 21 Apr 2008 02:33:55 +0000 http://www.azmortgageguru.com/should-i-borrow-from-401k-for-down-payment/#comment-2040 Very smart advice. The 401 K is there for a reason, to save---not to spend. If you can't come up with the down, keep on saving until you can. Very smart advice. The 401 K is there for a reason, to save—not to spend. If you can’t come up with the down, keep on saving until you can.

]]> By: Shailesh Ghimire http://www.azmortgageguru.com/should-i-borrow-from-401k-for-down-payment/#comment-2028 Shailesh Ghimire Fri, 18 Apr 2008 21:43:42 +0000 http://www.azmortgageguru.com/should-i-borrow-from-401k-for-down-payment/#comment-2028 Chris, Well, there will be circumstances where it could make sense, but as you point out there will not be a lot of situations where it would. Again, it requires a thoughtful evaluation of the particular situation. Chris,

Well, there will be circumstances where it could make sense, but as you point out there will not be a lot of situations where it would. Again, it requires a thoughtful evaluation of the particular situation.

]]> By: Chris Butterworth http://www.azmortgageguru.com/should-i-borrow-from-401k-for-down-payment/#comment-2024 Chris Butterworth Fri, 18 Apr 2008 19:20:11 +0000 http://www.azmortgageguru.com/should-i-borrow-from-401k-for-down-payment/#comment-2024 Amen brother! Although, in certain situations... If you have let's say > $50k in your 401k, and you're looking at purchasing a $200k home using FHA financing, 3% down is $6,000. Could you borrow $6k from yourself in order to buy a home (after exhausting all other possibilities for obtaining this 3% down payment)? In the long run, you could pay yourself back the $6k, you'd lose the appreciation on this part of your account while the money isn't in your account, but you would end up with 2 assets appreciating. The long-term gain on the house would probably more than make up for the $6-$15k lost on the 401k account. All that said, most people are not in the above-described scenario! :-) Amen brother!

Although, in certain situations… If you have let’s say > $50k in your 401k, and you’re looking at purchasing a $200k home using FHA financing, 3% down is $6,000. Could you borrow $6k from yourself in order to buy a home (after exhausting all other possibilities for obtaining this 3% down payment)? In the long run, you could pay yourself back the $6k, you’d lose the appreciation on this part of your account while the money isn’t in your account, but you would end up with 2 assets appreciating. The long-term gain on the house would probably more than make up for the $6-$15k lost on the 401k account.

All that said, most people are not in the above-described scenario! :-)

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