Larger down payment vs emptying 401k (mortgage, market, payments, real estate)

[mikealialex]

I have a choice to make. I can lower my proposed interest rate by .75% by going from a 5% downpayment to a 20% downpayment. To do this however, I would need to take the difference from a 401K. I would still have enough savings in other plans, and it is my understanding that being a first time home buyer, I will not be penalized for the withdrawl.
Which would be more benificial, more savings and higher interest (and payments), or the opposite. Thanks

[CouponJack]

Originally Posted by mikealialex

I have a choice to make. I can lower my proposed interest rate by .75% by going from a 5% downpayment to a 20% downpayment. To do this however, I would need to take the difference from a 401K. I would still have enough savings in other plans, and it is my understanding that being a first time home buyer, I will not be penalized for the withdrawl.
Which would be more benificial, more savings and higher interest (and payments), or the opposite. Thanks

I wouldn't touch the money in your 401k unless it was a last resort dire emergency which this isn't. Its for your retirement. Let the interest compound and grow till your ready to retire.

If you want to pay less interest off your mortgage, send in one extra payment every year towards your mortgage PRINCIPAL. By doing this you will cut 7 years off a 30 yr mortgage.

[killer2021]

I'd just buy a cheaper house.

[8 SNAKE]

Originally Posted by muneepenee

1. waet 6 months & the same hous will be cheeper
2. if yu want detaeled analysis, need tuno:
....morgage % interest wen 5% down.
....how much yu borro
....30 yeer lone?

I've got to agree with munee on both accounts, especially waiting it out in South Florida.

[NorthmeetsSouth]

I would leave the 401k alone and stay in the habit of always putting money away for your retirement. I would take an 80% mortgage at the best rate you can get and then a 15% mortgage at the higher rate, and add $ to the principle on the second mtg to get it paid off asap. Meanwhile, you will have a larger interest deduction on your taxes and your 401k will continue to grow tax-deferred.

[CouponJack]

Originally Posted by muneepenee

1. waet 6 months & the same hous will be cheeper
2. if yu want detaeled analysis, need tuno:
....morgage % interest wen 5% down.
....how much yu borro
....30 yeer lone?

And if someone comes in and makes an offer in the meantime, then he's stuck.
And exactly how would that help the OP???


I hear what you're saying, but we don't know all the details and that was not the OP's question.

[8 SNAKE]

Originally Posted by CouponJack

And if someone comes in and makes an offer in the meantime, then he's stuck.
And exactly how would that help the OP???

Do you perceive a housing shortage in South Florida?? Me neither.

Munee also pointed out (accurately) that the OP didn't give nearly enough information to make a well-informed recommendation about his/her situation.

[CouponJack]

Originally Posted by 8 SNAKE

Do you perceive a housing shortage in South Florida?? Me neither.

Munee also pointed out (accurately) that the OP didn't give nearly enough information to make a well-informed recommendation about his/her situation.

Sigh , We all know what the housing situation is in Florida. And if you read my posts on the real estate forum, you'd know I'm extremely bearish on resi RE right now.

Assuming he knows that RE values will go down but still wants to buy (because god forbid he might want to live in the house 25-30 years), what do you suggest? Touching the 401k or larger downpayment? I say leave the 401k alone.

[8 SNAKE]

Originally Posted by CouponJack

Sigh , We all know what the housing situation is in Florida. And if you read my posts on the real estate forum, you'd know I'm extremely bearish on resi RE right now.

No, I don't follow your posts.

Originally Posted by CouponJack

Assuming he knows that RE values will go down but still wants to buy (because god forbid he might want to live in the house 25-30 years), what do you suggest? Touching the 401k or larger downpayment? I say leave the 401k alone.

I'll say it...again. The OP didn't give us enough info to make a valid recommendation. We can assume all day long, but without facts to base advice on we're just throwing darts.

[mikealialex]

Sorry- no selling a house here, we rent. The bad market is what is pushing us out. Not the selling prices, but the Property taxes, Insurances, Hurricanes, etc. I decided after the previous replies to go with a 80% mortgage, and will be able to do this without stripping my 401k.