Reduce mortgage rates on jumbo .. 401K?

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We bought a home worth 670K, and makes 70k sissemakse.Olime as if considering a loan of 401K to reduce the annual salary is a common laenusummast.Meie 195K/annum.Kas is wise to borrow money or go to 401K 80/20 laenu.Mis is usually the best option to reduce mortgage interest rates? Thank you age is 34 A. YouPraegune .. Our main contribution is to buy the house of our assets in another country .. worth about 150K.Meie our goal is to pay the mortgage without selling it, if we’re really vaja.Arvestades, when the property in the U.S. .. We prefer to keep the property of others.

6 Comments
  1. Reply
    Bob
    January 31, 2011 at 2:54 am

    There really is not enough info to answer. Such as your age, years to retirement etc. However, most financial people, in my opinion would not recommend you borrow from your 401k unless it was an emergency. It will cost you all of the compound interest over the years. Yes it is true that you are paying yourself back but it is not worth lose in potential growth. Besides, it seems to me that you are buying too much house if you do not have the cash in hand to put 20% down.

  2. Reply
    HoHosareSICK
    January 31, 2011 at 3:00 am

    I personally wouldn’t take a 401K loan and you could read this article and see how it plays out:
    http://www.stretcher.com/stories/980525a.cfm

  3. Reply
    newjerseyguy
    January 31, 2011 at 3:08 am

    I would not borrow from the 401(k) accounts. If you can’t come up with 20% down on that income, then you are buying too much house.

  4. Reply
    digdowndeepnseattle
    January 31, 2011 at 3:40 am

    First, considering the size of that loan you will not be able to decrease the interest rate enough. Unless you’re in a high cost area you’d still be a jumbo loan as the limit is 50k. If you are in a high cost area then your 70k is already sufficient to get it under the jumbo loan limt. The 50k will not get you to 80/20 no matter what so you’re likely still stuck with PMI.

    Second, if you take a 50k loan you will either have to pay it back over 5 years or a period of up to 20 years. If you pay it back over 5 years then there will be minimal damage to your account in terms of “interest lost” or opportunity lost. But if you stretch it out over the 20 years then you’ll have damaged your account irreparably. The payment on a 5 year loan will be about $ 1000/ month. Wouldn’t you rather have that be tax deductible? Because it’s not in a 401k. If you take the 20 year loan then decide 5 years down the road you want to take a new job…you’ve then got to hope your new employer will accept a loan rollover. If not, you’ve got a taxable event and you’ve KILLED your retirement!!!

    This is a no brainer…accept the higher rate as a cost of doing business or find a house that costs $ 350,000 until you can save more for a substantial down payment.

  5. Reply
    Shayla
    January 31, 2011 at 4:13 am

    Unless you have a fixed-rate mortgage, the current mortgage interest rates are very important to deciding how much you should pay every monthcompanies offer different interest rates so it is a good idea to shop around for the best deal before settling on one particular lender.

  6. Reply
    mike c
    January 31, 2011 at 4:53 am

    try my guy Michael Deery 858.442.8626 or 858.200.9602
    http://www.citywidefinancialcorp.com/index.html

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