Would you use 401K loan for mortgage pay down?

[Wayne Brown]

Hello everyone! Which of the two options in this scenario would make more sense with the mortgage on my rental home.

I currently have 12K remaining on the mortgage of my first and only rental property after multiple lump sum payments. My goal is to purchase many more rental properties and I look forward to owning them free and clear. So here are the two options!

1. Leave home on 5.69% interest rate mortgage. 12K mortgage would be paid off in 5 years without any additional principal payments. But I am sure I will make additional payments toward principal. 5.69% interest will be paid to bank. 

2. Take out a 5 year - 401K loan at 6% interest. Pay the remaining 12K of mortgage. The 6% interest will be paid back to me in my 401K account instead of a mortgage lender. Own a free and clear investment property. Improved credit score with 12K less debt on paper when applying at the bank for my next loan for an investment property. 

Which route would you take and why? Thanks for your feedback!