Using 401k as down payment

[Ami Soni]

Hi Everyone,

My name is Ami Soni and I am from the suburbs of Chicago area. I am approaching my first deal and looking for more information on using 401k savings as down payment without the penalty? I believe I've heard on a podcast that you can borrow it for a certain # of years (less than 2)  and if paid back in the required time, there would be no penalty? Any information will help. Thank you and looking forward to connecting with others.

Ami 

[Rick Pinney]

Ami Soni the 401k loan is great. I used it and got a 5 year repayment from Wells Fargo. The shorter loans are for any kind of loan. They sometimes have 20 year repayment as well for home purchases yet there are more requirements for that.

Pros-you are the bank and you pay yourself interest. It does not go against your debt to credit on your credit report either. For the loan application I just had to provide a letter stating where the money came from with proof for underwriting.

Cons- will affect your return on your retirement account. If you are let go or change jobs, you will be forced to pay it back immediately or face taxes and penalties.

All in All I think this is the greatest loan you can get. Good luck!!