re: 401K vs House note

quote:

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I don't see this as borrowing from his 401k if the money would not have gone into the 401k in the first place. If he is going to reduce his 401k contributions by 10k/year over the next 2 years and invest it in a way that would generate taxable income, why not put it in the 401k, take the CY tax deduction, not generate taxable income, then take out the loan.

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I disagree it will eat you up if you are the kind of person to pay attention to it. the return on my 401k was in the 20% range when I did a 401k loan. So I missed that 20%+- return in addition to paying interest on the loan. Horrible deal. Better in my opinion to keep his money and invest in something conservative until he is ready to use the money to pay on the house. Personally I would want to finance the most amount possible as long as rates continue to be low.