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10-25-2009, 09:58 PM
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401k Loan -> House Downpayment
Hi Everyone,
I just wanted to get everyone's thoughts on taking our a 401K loan to put down a downpayment on a house? My 401K is doing very well right now (>35%), but I'd like to take about 40% of it out to put down a down payment on my first house. I'll be able to pay the loan off when I get the $8K next year. Thoughts? Possible downfalls? Thanks! Chris 
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10-26-2009, 06:14 AM
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Your 401k is a RETIREMENT fund.
It is NOT a down payment fund. It is NOT a new car fund. It is NOT a college savings fund. It is NOT a 'pay off the credit cards' fund. It is NOT a vacation fund. Get the idea? You should absolutely not borrow or cash out 401k assets for anything but retirement with the possible exception of a truly dire catastrophe. Something on the order of a family member in need of emergency life-saving medical care might qualify.
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Steve * Despite the high cost of living, it remains very popular. * Why should I pay for my daughter's education when she already knows everything? * There are no shortcuts to anywhere worth going.
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