Fund Down Payment w/ HELOC, Stock Purchase Plan, or 401K Loan?

[Nicholas K.]

Hi all,

Long-time lurker but first time poster :) 

I'm looking to buy my first deal and feel lucky enough to have a few options to fund a down payment. I'd like the community's advice/perspective on any of these options, just to ensure I'm not missing anything blatant.

1. Employee Stock Purchase Plan (ESPP): 15% discount at 2 buy periods per year, taking the lower of the price during the beginning and end of the period. The stock has been doing well, but I think many stocks have been doing well, and it just seems inevitable that the dip will come -- "when" is anyone's guess. I believe the 15% discount is essentially wiped off the books by the long-term capital gains taxes, so these funds are made up of the original investment and the stock gains, which has been substantial. I plan on continuing to contribute to ESPP.

2. HELOC: 7% variable rate, 20 year pay period

3. 401k Loan: 6.5% fixed rate, max 5 years. 401k investments are mostly index funds and such. 4.5% employer match. I will continue to contribute to the 401k.

Any suggestions/advice/input is greatly appreciated!

Nick

[Nicholas K.]

@George Blower -- thanks so much for the insight. Yes, the 401k permits a participant loan, and I can view what the payments would be with principal and interest figures illustrated. Will keep your points in mind as I assess which path(s) to use :)