Posted on: 29th Jul, 2011 02:08 am
hello there… i need quite some money for home improvement. i have equity in my property. so, i can take out a home equity loan. other than that, i can borrow from my 401k retirement fund. would the tax benefits on the home equity loan will be a better option compared to a 401k loan?
hi gallows,
i personally believe that it is always a good option to go for a home equity loan or a refinance if you wish to improve your home and have equity in it. this is obviously a better option compared to taking out a 401k loan. if you're not 59 and 1/2 years of age, you will be liable for paying 10% penalty if you take out a 401k loan. apart from that, if you take out a 401k loan and then if you are laid off, the loan must be repaid within a month or two.
take care.
i personally believe that it is always a good option to go for a home equity loan or a refinance if you wish to improve your home and have equity in it. this is obviously a better option compared to taking out a 401k loan. if you're not 59 and 1/2 years of age, you will be liable for paying 10% penalty if you take out a 401k loan. apart from that, if you take out a 401k loan and then if you are laid off, the loan must be repaid within a month or two.
take care.
the home equity loan might be tax deductible.
the 401k loan doesnt have a penalty to borrow from it.
but your money isnt working for you(cant grow) when you have it out on a loan.
sara is right about one thing..... the loan coming due upon termination of employment.
the 401k loan doesnt have a penalty to borrow from it.
but your money isnt working for you(cant grow) when you have it out on a loan.
sara is right about one thing..... the loan coming due upon termination of employment.
Dear Gallows;
An equity loan would always be a better bet then using your 401k loan. Since you are looking for an equity loan, does that mean you have an existing mortgage? If so, one other option would be to refinance your primary mortgage for a lower rate and take cash out at the same time for your home improvement. Your pricing will always be better when your loan is in first lien position.
Best Regards;
Dmitriy Bleynis
Regional Sales Manager
STERLING NATIONAL BANK
STERLING NATIONAL MORTGAGE
[Contact details deleted as per forum rules. Thanks.]
An equity loan would always be a better bet then using your 401k loan. Since you are looking for an equity loan, does that mean you have an existing mortgage? If so, one other option would be to refinance your primary mortgage for a lower rate and take cash out at the same time for your home improvement. Your pricing will always be better when your loan is in first lien position.
Best Regards;
Dmitriy Bleynis
Regional Sales Manager
STERLING NATIONAL BANK
STERLING NATIONAL MORTGAGE
[Contact details deleted as per forum rules. Thanks.]