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

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Well, I'm just telling you how my plan works. In mine, you also pay the 3.75% interest back into the "Common Assets" portion of your plan. This is from my plan's website: When you borrow money from the Savings Plan, the assets in your Savings Plan Account serve as collateral for the loan. When you have an outstanding loan, withdrawals/distributions that will reduce the collateral value below the amount of your outstanding loan balance will be restricted.

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Exactly how mine works. In fact, I'd be willing to bet we work for the same company. People on this board don't understand how it works because it's not typical. That said, as it doesn't reduce your 401k balance, it's an excellent way to finance purchases or significant events.