The repayment terms for a 401k participant loan are equal monthly/quarterly payments of principal and interest (typically prime plus 1%) over a 5 year term (longer if used to acquire your principal residence).Please note that if you take a full $50,000 and then pay back the loan, you can't take another $50,000 until 12 months after the first loan was fully paid back.Per the loan offset rules that went into effect with the 2018 Tax and Job Act: if you leave your job and the loan is current at the time you leave your job but then the loan goes into default because you left your job, you will have until your tax return deadline (including any timely filed extension) to make the loan current by depositing the outstanding balance into an IRA (and thereby avoid the taxes and penalties that would otherwise apply).Please keep in mind the multiple loan rules:Under those rules, the sum of the balances of a participant's outstanding 401k loans under a single 401k plan (using the highest outstanding balance of each loan over the last 12 months) can't exceed 50% or $50,000 whichever is less.

I'd like to hire an online accountant specializing in long term rentals across the nation.  Please contact me if you provide this service.  My wife & I are at the beginning stage.  We purchased our first lot and w...

Only concern I have is the penalty fees if I withdraw early.

The repayment terms for a 401k participant loan are equal monthly/quarterly payments of principal and interest (typically prime plus 1%) over a 5 year term (longer if used to acquire your principal residence).Please note that if you take a full $50,000 and then pay back the loan, you can't take another $50,000 until 12 months after the first loan was fully paid back.Per the loan offset rules that went into effect with the 2018 Tax and Job Act: if you leave your job and the loan is current at the time you leave your job but then the loan goes into default because you left your job, you will have until your tax return deadline (including any timely filed extension) to make the loan current by depositing the outstanding balance into an IRA (and thereby avoid the taxes and penalties that would otherwise apply).Please keep in mind the multiple loan rules:Under those rules, the sum of the balances of a participant's outstanding 401k loans under a single 401k plan (using the highest outstanding balance of each loan over the last 12 months) can't exceed 50% or $50,000 whichever is less.

If the property is a great opportunity, look for a lender who will do refinancing quickly and be sure the original lender lender does not have a prepayment penalty in their language.

At this point, I'm sort of weirded out and she has this weird look on her face like can't comprehend. she says "I will have to seek legal advice over it and she would get back to me".

I’ll seek to get more clarification on this area.

I obviously need to look back over our purchase documents, but I remember when we purchased the house there were several rules we had to abide by (we had to owner-occupy the house, for one, and there were some big tax penalties if we wanted to sell within 10 years). 2.

The only thing to consider is prepayment penalty.  

How could she pay for her portion of penalty?