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Borrowing from your 401K, Have you refinanced your home into oblivion? Tapped out every available money resource with a myriad of loans and credit cards? There is one last option: borrowing from your 401(k).



 Borrowing from your 401K

Have you refinanced your home into oblivion? Tapped out every available money resource with a myriad of loans and credit cards? There is one last option: borrowing from your 401(k).
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If you've never heard of this option, it's because until recently, it just wasn't done that frequently. But with the market still not fully recovered, and people desiring to cut their high interest debt, more folks are discovering this alternative lending source.
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Pros:
  • A 401(k) loan does not appear on your credit report. They are not reported to Experian, and do not become a part of your credit history.
  • The interest on these loans is some of the lowest out there.
  • You're paying yourself the interest, not some bank.
  • You'll get your money more quickly than if you were using another means of borrowing.
  • Since it's a loan, you will not be charged the 10 percent early withdrawal penalties plus income taxes you would have to pay if you withdrew the money.
  • You don't have to qualify for the loan through the usual long, painful credit approval process, because in effect, you are the lender.
  • No assets or collateral are needed to secure the loan.
.
...Since it's a loan, you will not be charged
the 10 percent early withdrawal penalties
plus income taxes.
.
Cons:
  • The biggest con is that you are forfeiting the accrued interest you would earn if your money stayed in the 401(k). Calculated over the long term, it can cost tens (even hundreds) of thousands of dollars in potential gain.
  • Unlike a home equity loan, the interest is not tax deductible.
  • Some plans do not allow contributions to the 401(k) for the period of the loan.
  • If you lose or quit your job, the loan is often due in full
 

For more real estate information, including a FREE Home Market Analysis, please contact me at Kim@KimKroner.com or on my mobile phone at 7039462526.

For More Information:


If you are unable to put 20 percent down for your mortgage payment, you will be required to pay Private Mortgage Insurance or PMI. This insurance protects your lender from borrower defaults. If you are thinking about buying a home and your mortgage will require you to carry PMI, keep in mind that you’ll be increasing your monthly cost of owning a home. The good news is you’ll only need to carry PMI until the value of your home has appreciated or when your loan has been paid down sufficiently. In today’s market place, the benefits of being a homeowner often outweigh the extra monthly cost of PMI. I’d be happy to help you evaluate mortgage options you’re considering or refer you to a qualified lending professional who can give you a full picture of your options. For More Information: Kim Kroner Realtor - Associate Broker Top Producer - NVAR Multi Million Dollar Sales Club Member - Long & Foster Chairman's Club Long & Foster Christie's International kim@kimkroner.com (703) 946-2526 (800) 9611328 www.kimkroner.com 309 Maple Ave W. Vienna, VA 22180 Borrowing from your 401K Have you refinanced your home into oblivion? Tapped out every available money resource with a myriad of loans and credit cards? There is one last option: borrowing from your 401(k). . If you've never heard of this option, it's because until recently, it just wasn't done that frequently. But with the market still not fully recovered, and people desiring to cut their high interest debt, more folks are discovering this alternative lending source. . Pros: A 401(k) loan does not appear on your credit report. They are not reported to Experian, and do not become a part of your credit history. The interest on these loans is some of the lowest out there. You're paying yourself the interest, not some bank. You'll get your money more quickly than if you were using another means of borrowing. Since it's a loan, you will not be charged the 10 percent early withdrawal penalties plus income taxes you would have to pay if you withdrew the money. You don't have to qualify for the loan through the usual long, painful credit approval process, because in effect, you are the lender. No assets or collateral are needed to secure the loan. . ...Since it's a loan, you will not be charged the 10 percent early withdrawal penalties plus income taxes. . Cons: The biggest con is that you are forfeiting the accrued interest you would earn if your money stayed in the 401(k). Calculated over the long term, it can cost tens (even hundreds) of thousands of dollars in potential gain. Unlike a home equity loan, the interest is not tax deductible. Some plans do not allow contributions to the 401(k) for the period of the loan. If you lose or quit your job, the loan is often due in full For more real estate information, including a FREE Home Market Analysis, please contact me at Kim@KimKroner.com or on my mobile phone at 7039462526. For More Information:

Kim Kroner Realtor - Associate Broker
Top Producer - NVAR Multi Million Dollar Sales Club
Member - Long & Foster Chairman's Club
Long & Foster Christie's International
kim@kimkroner.com
(703) 946-2526
(800) 9611328
www.kimkroner.com

  • Have you refinanced your home into oblivion? Tapped out every available money resource with a myriad of loans and credit cards? There is one last option: borrowing from your 401(k).
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Location: 1211 S Eads St, Arlington, VA 22202, USA

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