Borrowing against 401k to use as down payment for first house

[her209]

Has anyone gone this route... if so, what were the terms of your loan?

 

[NL5]

Home ownership is almost always a good idea.

 

[Laughingman12]

Making sure your not borrowing 410k from the Mafia.

 

[Evadman]

Take a hardship withdrawl instead.

 

[RaiderJ]

Typically you want to leave your money in your 401k since that's where it will gain the most value. However, depending on your housing market, real estate might be a better investment. It's certainly better than borrowing money from a credit card or something, and owning is generally better than renting.

 

[IceBergSLiM]

see a financial advisor. who can take all factors into account and give you the best feedback.

 

[SoulAssassin]

Isn't this the 3rd time we've had this question in the past two weeks or so?

 

[halik]

good idea,
from everythign I've read borrowing against the 401K (or Roth) is the way to go. There was an article on MSN.com about it

 

[Rage187]

I did the same thing 6 months ago, was a great idea.

I am paying it back to myself at 9.5% over the next 18 months.

 

[j00fek]

its not worth it, consult a financial adviser

 

[Specop 007]

Originally posted by: j00fek
its not worth it, consult a financial adviser

It very well could be, and most likely is.

First off, the interest is paid back to him. Secondly, he will gain a huge tax deduction from owning the house as well. You can also (hopefully) factor in rising property values into the equation as well.

It might not *always* be a good idea, but more then likely it is. The interest is paid back to him, he gains a helluva tax deduction, he gains a potential investment and he potentially doesnt have to pay PMI.

Gee.....Wheres the downside. Unless hes smoking hot on his 401k choices and getting a hell of a return there I cant really see not doing it.