Reply to Borrowing from retirement accounts for down payment

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[quote=Anonymous]If you'd be slowly repaying it, no way would I borrow from retirement. What if you lose your job? The full repayment is due quickly (like 90 days?), or you owe the taxes on it come tax time. Neither of which are palatable options during a job loss.

Also, don't forget the max you can borrow is 50K or half the balance of your account, whichever is LOWER.

However, we did take about 95K from 2 401Ks recently to bridge buying a house before selling our current one. We knew our house would sell extremely fast, and it really was just to keep our cash cushion high through the move. We're disciplined and weren't worried about spending it, and in a competitive market, a contingency to sell your current home is a no go.

It worked out great. They were paid back in less than 2 months and it cost us about $40 in a processing fees. So I'm not anti borrowing ever, but only in very short term situations. I'd say with a like of sight to repayment in 6 months or less. Financial advisor we work with agreed. [/quote]

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