There are many factors in your question.
1. First, If you have $40k saved and still need more, then it would appear you are trying to put 20% down ($50k). This will save you from having to pay PMI (private mortgage insurance).
2. Second, a 401k loan is not always a bad idea, as you are paying yourself interest and as long as you pay it back, you have no tax implications. One note of caution, I took a 401k loan for dental work and was laid off before I could pay it all back, so it was unable to be included in my rollover to my new IRA and I had to pay taxes on the amount of the outstanding loan. So the lesson to be learned is... to only take a 401k if you are sure you will not be leaving your employer (either voluntarily or involuntarily) until the end of the term of your loan repayment.
3. Third, as far as paying down your credit card debt, I imagine it will be a higher interest rate than your 401k, so as long as there are no fees to your 401k loan, it could make sense to use the 401k loan to pay down your credit card debt (in part or in full). Either way, you will still have a monthly payment to budget for (whether credit card or 401k).
4. Lastly, it could make sense financially to put 5, 10 or 15% down (instead of 20%) and pay the PMI for a time. You could use the excess funds to pay down the higher-interest credit cards and lower or wipe out entirely that monthly payment. As you have extra money and pay down your mortgage, if you reach 20% paid in prior to the end of the PMI payment period, you can stop paying PMI and may actually get a refund of some PMI paid in.
You would really have to speak to an agent or a mortgage rep to run all these scenarios in Excel to see which one made the most sense. Hope this helps and let me know if you need anything else. Good luck!... more
Your best bet is to call around different Mortgage Brokers to see who has the best loan as well as the besgt program for your situation. I can recommend two different Mortgage Companies who are always very competitive with their rates and their programs. Please see the contact informatiob below, and just use my name:
First American Mortgage
Price Financial Services
If you need any other assistance with your real estate needs, please feel free to give me a call or send me an email. There are some gorgeous properties throughout the Main Line that are available for purchase.
Stacey Karp, Realtor, ABR, e-Pro
CENTURY 21 Alliance - Royersford
322 N. Lewis Road
Royersford, PA 19468
610-948-2100 x311- business phone
610-948-2188 - fax
610-453-2488 - cell
Licensed in PA License # RS302275
YOUR REFERRALS ARE ALWAYS WELCOME!... more