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Reply to "Buying a new house before selling - money options"
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[quote=Anonymous][quote=Anonymous]Borrowing from your TSP is a great option. Negligible fees, the interest you pay goes to yourself, and beyond documenting that the money comes from your own retirement account, it won't count towards your debt to income ratio. I have twice borrowed from my retirement accounts to facilitate house purchases. You are misinformed about there being a pre-tax/post-tax issue. You borrow $X, you pay back $X, there is no additional tax burden. To see this easily, imagine that you borrowed $50K, cashed the check, and then immediately transferred the $50K back to the TSP to repay the loan. Clearly, there are no additional taxes. It is no different if you repay the loan after a few months.[/quote] The difference is that the $50K taken from the TSP was pre-tax. After a few months you are paying back with post-tax dollars. So that $50K paid back could have been $75K if it went straight to TSP out of your paycheck.[/quote]
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