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Using your 401k to buy a house
Posted on 12/27/13 at 8:02 pm
Posted on 12/27/13 at 8:02 pm
Backstory. I have two acres of paid off land that I would like to build on. The appraised value of the land will cover my 20% down on the loan to avoid pmi. The house will cost roughly 180 k to turn key but I plan on doing some of the finishing and interior work myself to hopefully save 30 k bringing the 180k to 150 k and I was thinking of using 40k from my 401 k to bring my total loan value down to around 100 k.
I know that the penalties will be stupid and I also have to suspend my 401 k for 6 months.
I am 34 and retiring seems like a pipe dream and I am also banking that there will be another stock market crash coming in the next few years anyway.
Any advice out there tiger nation.
I know that the penalties will be stupid and I also have to suspend my 401 k for 6 months.
I am 34 and retiring seems like a pipe dream and I am also banking that there will be another stock market crash coming in the next few years anyway.
Any advice out there tiger nation.
4
Posted on 12/27/13 at 8:09 pm to camweb68
No. The difference in 40k right now with the interest rate you can most likely get will not be worth it.
You definitely won't be able to retire if you try things like this.
You definitely won't be able to retire if you try things like this.
Posted on 12/27/13 at 8:13 pm to camweb68
The difference between 110k and150k 30 yr loan is about $200/ month, I would not clean out or even dent my 401k for such little difference
This post was edited on 12/27/13 at 8:17 pm
Posted on 12/28/13 at 12:02 am to camweb68
Terrible idea.
Money is cheap. I'm a dave ramsey beater too but paying off interest rates that are this low makes no sense.
Do not. I repeat. DO NOT TOUCH YOUR 401K.
Money is cheap. I'm a dave ramsey beater too but paying off interest rates that are this low makes no sense.
Do not. I repeat. DO NOT TOUCH YOUR 401K.
Posted on 1/1/14 at 10:37 am to camweb68
A mortgage is cheaper than a 401K loan, so no reason to do it.
That said, 401K loans are under-rated.
That said, 401K loans are under-rated.
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