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goblueM t1_jadgn4l wrote

Zero

Pay PMI for a couple years rather than robbing your 401k

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texanchris t1_jadhuzs wrote

This can’t be upvoted enough. Don’t withdraw 401k funds so you don’t have to pay PMI. PMI can get removed once you hit the 75% LTV mark and it’s not permanent.

Edit: assuming conventional loan and not FHA

7

goblueM t1_jadiabv wrote

Usually 78% LTV

I was paying $26 a month in PMI. It's often a very modest amount, if you have decent credit score and didn't buy a high priced house

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tomsen12 OP t1_jadltef wrote

Does the fact that I can’t put 20% down increases the lending interest rates? This is a conventional loan.

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goblueM t1_jadmc2d wrote

it can. depends on the lender and the specifics of the loan

still likely to be better than raiding your 401k

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innkeeper_77 t1_jae7dlh wrote

A 401k loan is somewhat better than actually “raiding” it but if the market recovers while the loan is out that is obviously a terrible idea.

If OP could pay it back very quickly it wouldn’t automatically be a terrible idea especially if they can get a better interest rate that way.

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goblueM t1_jaea9ka wrote

Yes this is not cashing out, but I'm always hesitant to suggest a 401k loan because IMO it encourages bad behavior. If you can't afford the stuff without taking a loan out of your retirement...you can't afford it

2