Reply to Taking out a 401k loan for larger down payment

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]If you can "aggressively pay yourself back" for the 401k loan, just do that in advance a save a bigger downpayment in the first place. Nobody wants to have to wait any more. [/quote]

OP here, yes I was expecting people to say this but I don’t think it’s unreasonable to not want to wait for a house because it impacts your lifestyle significantly and playing the waiting game has only hurt people in the past 10 years.

I wasn’t aware of the recasting option. If you can do it with little to no fees I think this would be a good choice. I thought my only option would be a complete refinance which is heavy on fees [/quote]

My friend did this at about the same age/net worth as you, against my objections, and it turned out fine.  They paid back the 401k and got the house.  Maybe they lost a little in market gains in the 401k, but to them, it was worth it.  If you intend to recast, make sure your mortgage has a no-fee option to do it.  [/quote]

Sorry, I misread your original post.  I thought you meant to take out a 401k loan for the downpayment.  Taking a 401k loan out to recast the mortgage makes less sense.  How much interest do you pay back the 401k?  I assume it's with after-tax dollars?  Are you guys house-poor?  I think it's a bad idea.  [/quote]

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