re: Is borrowing against your 401(k) for a home down payment a good idea?

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Terrible idea IMV...it speaks to you either buying too much house or not being in the financial situation to be buying a house.

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Not really. I'd like to think I am pretty conservative when it comes to personal finances. Real estate in California is so expensive, it is hard to come up with 20% downpayment for your home. This is our first home and the cheapest condos we can get in good school districts and good areas runs upwards of $600K. The home we are looking at is $590K. Our original budget was $500K and we have about $90K in liquid savings. But after having seen homes for the past 2 months, we have come to the realization that we need to increase our budget, and the homes we like at are in the $590-600K range. This means we are short about ~$30K that I need to be able to put 20% ($120K) down again. I am hoping I can borrow that $30K from my 401(K) instead of getting a HELOC or paying a PMI.