Borrowing from TSP for down payment?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This sounds like a horrible, horrible idea. But, if you are looking to make sure you stay in debt and live above your means, then go for it.

It's just a different way of looking at the world. But, what do I know? No debt at all. $900K house paid off, no car debt, no college debt, and about $1.8 mil saved on a single-earner gov. salary household. But, hey, if you want to take from your TSP to buy a house that you can't afford, good luck with that.

Literally, how is this even possible?

PP forgot the line that they inherited money and didn’t actually experience any humility. You know, it’s just a different way of looking at the world. I hope their family puts them in a nursing home- one of the low grade chains and pissed their money away on strippers and horse races.

no. no inheritance at all. In fact, all of our parents are still alive. Only one of my grandparents finished HS (a grandmother). DH has a military pension. Other than that, we invested in some real estate (not commercial) that we made some $ on, but we also lost money on housing. We don't buy most things until we can pay for it (not including housing), we paid off student loans before we had kids. We don't spend a lot... but we still spend on pretty much all that we want/need. We invest $ and let the market help us out over time.... that's how you make $. All of the $1.8 mil is money that we worked for, saved, and invested over many years. We are in 40's/50's. Our house was largely the culmination of living in Townhouses and investing in another and over time moving up to a SFH. We actually lost money on our last two homes.... but did make some money in the 2000s.

The different way of looking at the world is not wanting to be shackled by debt and therefore, making choices that delay gratification until you can afford the next purchase.

t sounds like you bought real estate (maybe multiples properties?) before housing bubble?

Yes, that makes sense then. And we live in different era now.

[Anonymous]

Anonymous wrote:This sounds like a horrible, horrible idea. But, if you are looking to make sure you stay in debt and live above your means, then go for it.

It's just a different way of looking at the world. But, what do I know? No debt at all. $900K house paid off, no car debt, no college debt, and about $1.8 mil saved on a single-earner gov. salary household. But, hey, if you want to take from your TSP to buy a house that you can't afford, good luck with that.

You sound stupid.

[Anonymous]

Anonymous wrote:Any reputable financial adviser would tell you this is a very bad idea. You need to pretend that money doesn’t exist and don’t touch it.

Way to parrot cliched rubbish. If it’s s small amount to, say, get to 20 percent down payment, why wouldn’t you consider it?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This sounds like a horrible, horrible idea. But, if you are looking to make sure you stay in debt and live above your means, then go for it.

It's just a different way of looking at the world. But, what do I know? No debt at all. $900K house paid off, no car debt, no college debt, and about $1.8 mil saved on a single-earner gov. salary household. But, hey, if you want to take from your TSP to buy a house that you can't afford, good luck with that.

Literally, how is this even possible?

PP forgot the line that they inherited money and didn’t actually experience any humility. You know, it’s just a different way of looking at the world. I hope their family puts them in a nursing home- one of the low grade chains and pissed their money away on strippers and horse races.

no. no inheritance at all. In fact, all of our parents are still alive. Only one of my grandparents finished HS (a grandmother). DH has a military pension. Other than that, we invested in some real estate (not commercial) that we made some $ on, but we also lost money on housing. We don't buy most things until we can pay for it (not including housing), we paid off student loans before we had kids. We don't spend a lot... but we still spend on pretty much all that we want/need. We invest $ and let the market help us out over time.... that's how you make $. All of the $1.8 mil is money that we worked for, saved, and invested over many years. We are in 40's/50's. Our house was largely the culmination of living in Townhouses and investing in another and over time moving up to a SFH. We actually lost money on our last two homes.... but did make some money in the 2000s.

The different way of looking at the world is not wanting to be shackled by debt and therefore, making choices that delay gratification until you can afford the next purchase.

Yeah - so your husband is still working (as a fed) but is drawing a pension as well. That extra, what - $30,000? $40,000 each year? Pay no attention to that, it probably doesn't mean that much.

Idiot.

[Anonymous]

Anonymous wrote:My DH did this to buy his condo -- and no, the rules are not all the same as borrowing from a 401k. The main difference is that a TSP loan has a 2% interest rate that gets paid into the borrower's TSP when you pay it back. So that's a pro.

Cons - you might want to leave your job, you will miss out on growth and compound interest for the money you pull out, and needing to borrow a down payment in the first place might be a sign you can't afford the house.

You pay yourself the G fund rate. So you can also rebalance the rest of your holdings away from the G fund to try to return to the exposure you had.

We own one home. We are both feds and will probably do this as a bridge loan so we don't have to make a contingent offer, but then pay it back when we sell our first house. It doesn't show up as a loan on your credit report.

If I was buying my first house I would probably try to avoid this and even pay PMI to do so.

[Anonymous]

i took a 403b loan to purchase my 2nd condo. I repaid the loan in 1 year instead of 5. No regrets.

[Anonymous]

Anonymous wrote:Any reputable financial adviser would tell you this is a very bad idea. You need to pretend that money doesn’t exist and don’t touch it.

right....as opposed to missing out on the opportunity to own a home and create equity that often surpasses what you would earn if you leave that money in your account.

[Anonymous]

Can you afford to pay back the TSP loan and the mortgage? Would you have to stop making TSP contributions? Are you adding the TSP loan to some other money to make your DP larger, or getting all your DP from your TSP? What is your risk tolerance?

[Anonymous]

Anonymous wrote:

Anonymous wrote:Any reputable financial adviser would tell you this is a very bad idea. You need to pretend that money doesn’t exist and don’t touch it.

right....as opposed to missing out on the opportunity to own a home and create equity that often surpasses what you would earn if you leave that money in your account.

That's what ALL the realtors and finance people used to say... see how that turned out.

You seem to want your cake and to eat it too! You can have a house and no TSP or you can have your TSP and no house (at least not right now). You want both. The mindset of wanting everything without waiting is what gets people in trouble.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Any reputable financial adviser would tell you this is a very bad idea. You need to pretend that money doesn’t exist and don’t touch it.

right....as opposed to missing out on the opportunity to own a home and create equity that often surpasses what you would earn if you leave that money in your account.

That's what ALL the realtors and finance people used to say... see how that turned out.

You seem to want your cake and to eat it too! You can have a house and no TSP or you can have your TSP and no house (at least not right now). You want both. The mindset of wanting everything without waiting is what gets people in trouble.

^^^^ you have no idea how life works, or how finances work^^^^ But you go right ahead and stay on the side-lines and NOT buy a home because you're too chicken to take advantage of a perfectly safe tool that is at your disposal, that HAS YOUR OWN MONEY IN IT! It's a mind-set. Clearly you are in the "afraid to live life" mind-set.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Any reputable financial adviser would tell you this is a very bad idea. You need to pretend that money doesn’t exist and don’t touch it.

right....as opposed to missing out on the opportunity to own a home and create equity that often surpasses what you would earn if you leave that money in your account.

That's what ALL the realtors and finance people used to say... see how that turned out.

You seem to want your cake and to eat it too! You can have a house and no TSP or you can have your TSP and no house (at least not right now). You want both. The mindset of wanting everything without waiting is what gets people in trouble.

^^^^ you have no idea how life works, or how finances work^^^^ But you go right ahead and stay on the side-lines and NOT buy a home because you're too chicken to take advantage of a perfectly safe tool that is at your disposal, that HAS YOUR OWN MONEY IN IT! It's a mind-set. Clearly you are in the "afraid to live life" mind-set.

I am guessing you are mid-30s? Not old enough to experience 2008 housing bubble?

-np

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Any reputable financial adviser would tell you this is a very bad idea. You need to pretend that money doesn’t exist and don’t touch it.

right....as opposed to missing out on the opportunity to own a home and create equity that often surpasses what you would earn if you leave that money in your account.

That's what ALL the realtors and finance people used to say... see how that turned out.

You seem to want your cake and to eat it too! You can have a house and no TSP or you can have your TSP and no house (at least not right now). You want both. The mindset of wanting everything without waiting is what gets people in trouble.

^^^^ you have no idea how life works, or how finances work^^^^ But you go right ahead and stay on the side-lines and NOT buy a home because you're too chicken to take advantage of a perfectly safe tool that is at your disposal, that HAS YOUR OWN MONEY IN IT! It's a mind-set. Clearly you are in the "afraid to live life" mind-set.

I am guessing you are mid-30s? Not old enough to experience 2008 housing bubble?

-np

Nope! I'm 52 which is why I know what I'm talking about. I've been around long enough to see/experience the recession in the 70's, 80's, 90's and again in 2008. it's this experience that has shown me that the market always bounces back, and then some. I have bought and sold 5 different homes throughout my adult life. By no means does that make me an expert, but I have been around the block enough times to see how the chips usually end up landing.

[Anonymous]

Anonymous wrote:pro - you pay yourself back including interest
con - you miss out on earnings for the amount you borrowed

You’re not even missing out much on earnings if you rebalance your holdings to consider the outstanding loan balance as part of your bond allocation.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Any reputable financial adviser would tell you this is a very bad idea. You need to pretend that money doesn’t exist and don’t touch it.

right....as opposed to missing out on the opportunity to own a home and create equity that often surpasses what you would earn if you leave that money in your account.

That's what ALL the realtors and finance people used to say... see how that turned out.

You seem to want your cake and to eat it too! You can have a house and no TSP or you can have your TSP and no house (at least not right now). You want both. The mindset of wanting everything without waiting is what gets people in trouble.

^^^^ you have no idea how life works, or how finances work^^^^ But you go right ahead and stay on the side-lines and NOT buy a home because you're too chicken to take advantage of a perfectly safe tool that is at your disposal, that HAS YOUR OWN MONEY IN IT! It's a mind-set. Clearly you are in the "afraid to live life" mind-set.

No particular dog in this fight, and I don't count myself as particularly savvy financially, but to me the big question is how much money is in the TSP. If you've been erring on the side of slogging money into the TSP and feel that borrowing from it won't hurt your retirement goals, why not give yourself a loan and pay yourself the interest. However, if you have only saved very small amounts in the TSP, and do not have cash savings for the downpayment either, then you might be looking at a purchase you cannot yet afford. I would start gaming out in a napkin what buying, and not buying, will mean for you.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Any reputable financial adviser would tell you this is a very bad idea. You need to pretend that money doesn’t exist and don’t touch it.

right....as opposed to missing out on the opportunity to own a home and create equity that often surpasses what you would earn if you leave that money in your account.

That's what ALL the realtors and finance people used to say... see how that turned out.

You seem to want your cake and to eat it too! You can have a house and no TSP or you can have your TSP and no house (at least not right now). You want both. The mindset of wanting everything without waiting is what gets people in trouble.

^^^^ you have no idea how life works, or how finances work^^^^ But you go right ahead and stay on the side-lines and NOT buy a home because you're too chicken to take advantage of a perfectly safe tool that is at your disposal, that HAS YOUR OWN MONEY IN IT! It's a mind-set. Clearly you are in the "afraid to live life" mind-set.

I am guessing you are mid-30s? Not old enough to experience 2008 housing bubble?

-np

Nope! I'm 52 which is why I know what I'm talking about. I've been around long enough to see/experience the recession in the 70's, 80's, 90's and again in 2008. it's this experience that has shown me that the market always bounces back, and then some. I have bought and sold 5 different homes throughout my adult life. By no means does that make me an expert, but I have been around the block enough times to see how the chips usually end up landing.

a perfect example of older doesn't mean wiser. some stupid young people just become stupid old people.