home loan in USA

[eclipse]

I  am considering  401 (K)  loan for primary residence..to increase my down payment amount and there by  cut down PMI an home loan interest..just debating the rate of interest  401(K) loan 5.25  vs current lower home loan interest rates. Of course 401(K) interest  paid would back to my account...but  is it worth taking given the interest rate...vs home loan rates

pros /cons please...any pointers are appreciated...

if anyone has taken ....be our light purugu...

 

[andhrabullet]

401 k loan not recommended.

rules chusuko okasari

[eclipse]

rules emi complex levu..

primary residence avuthe..can take up to 10 years

monthly payment is after taxes ( because we get lumpsum now) .. As it is taking a loan from our own account for which we are given ready cash ( tax paid) so we have to give the same back after taxes

( Kind of ready cash in hand )

 

Concern okkate home loan lender rate 3.25 + PMI (around 100$/m for 5 years)  vs 401K loan 5.25 over 10 years/less depending  ( risking 401 K investments gatra)

[Quickgun_murugan]

21 minutes ago, eclipse said:

rules emi complex levu..

primary residence avuthe..can take up to 10 years

monthly payment is after taxes ( because we get lumpsum now) .. As it is taking a loan from our own account for which we are given ready cash ( tax paid) so we have to give the same back after taxes

( Kind of ready cash in hand )

 

Concern okkate home loan lender rate 3.25 + PMI (around 100$/m for 5 years)  vs 401K loan 5.25 over 10 years/less depending  ( risking 401 K investments gatra)

Illu ready untey first entha untey antha pay chesi start cheyyu bro ... pmi lantivi eppudaina teeseyyochu by paying the remaining amount until you get some clarity on the 401k loan

[neekunuvvetopu]

1 hour ago, eclipse said:

rules emi complex levu..

primary residence avuthe..can take up to 10 years

monthly payment is after taxes ( because we get lumpsum now) .. As it is taking a loan from our own account for which we are given ready cash ( tax paid) so we have to give the same back after taxes

( Kind of ready cash in hand )

 

Concern okkate home loan lender rate 3.25 + PMI (around 100$/m for 5 years)  vs 401K loan 5.25 over 10 years/less depending  ( risking 401 K investments gatra)

with so much less interest rate you are getting, not worth it bhayya.  what is the loan amount?

[chingchang]

1 hour ago, eclipse said:

I  am considering  401 (K)  loan for primary residence..to increase my down payment amount and there by  cut down PMI an home loan interest..just debating the rate of interest  401(K) loan 5.25  vs current lower home loan interest rates. Of course 401(K) interest  paid would back to my account...but  is it worth taking given the interest rate...vs home loan rates

pros /cons please...any pointers are appreciated...

if anyone has taken ....be our light purugu...

 

Go for it .. i did the same when i bought my house. I know interest rates are slightly higher but you are paying off to your own account. Remember, yu are paying after tax money back to your loan. Its not tax exempt. 

Make sure to call your 401k provider and check what happens if you leave your employer. When i got my loan, Fidelity (my 401k provider) told me that if i leave the company, i have an option to setup direct deduction from my bank account instead of pay check. One of my friend had to pay everything with in 60 days after leaving his job. The policy changes based on your employer. 

[eclipse]

6 minutes ago, neekunuvvetopu said:

with so much less interest rate you are getting, not worth it bhayya.  what is the loan amount?

loan amount is 450K..I can go up to 50K  max from my 401K

[eclipse]

5 minutes ago, chingchang said:

Go for it .. i did the same when i bought my house. I know interest rates are slightly higher but you are paying off to your own account. Remember, yu are paying after tax money back to your loan. Its not tax exempt. 

Make sure to call your 401k provider and check what happens if you leave your employer. When i got my loan, Fidelity (my 401k provider) told me that if i leave the company, i have an option to setup direct deduction from my bank account instead of pay check. One of my friend had to pay everything with in 60 days after leaving his job. The policy changes based on your employer. 

Thanks Bhayya..Can I ask what is your term on the  loan ( for how many years )  you have taken it and what is the interest rate ...? What was your down payment and is 401 K only the total down payment of you have added other funds towards down payment ?  for the questions..hope you dont mind,,..

It is 5.25 for me and current home loan interest rates as low as 3.25 ..would it make sense to go with 401K  loan for 12 years? 

[chingchang]

22 minutes ago, eclipse said:

Thanks Bhayya..Can I ask what is your term on the  loan ( for how many years )  you have taken it and what is the interest rate ...? What was your down payment and is 401 K only the total down payment of you have added other funds towards down payment ?  for the questions..hope you dont mind,,..

It is 5.25 for me and current home loan interest rates as low as 3.25 ..would it make sense to go with 401K  loan for 12 years? 

30 yrs fixed , 7/1 arm. This was in 2016. my interest rate was 3.0. i had to pay 40K down to make it 10%. My lender have a no PMI option for first time home buyer with 10% so i dont have to pay 20%in my case. I paid 25K from my pocket and 15k from 401k loan. 

 

401k loan have only two options - 5 years or 10 years. If it is for home loan, they will give you 10 year term , personal loan is 5 years .. Payment is total amount /10*26 (10 years * 26 pay checks for me). They calculate total interest for your loan amount and add that to total amount before calculating your amount to be deducted. I think Mine is 59 bucks per pay check. 

[pandemkodi]

Try second loan bro since interest  rates are low , with 401 you will lose 10 percent gains every year if market performs avg 

[user789]

3 hours ago, eclipse said:

loan amount is 450K..I can go up to 50K  max from my 401K

Which city ? Single Family Home ?