woessner[at]gmail.com wrote:

- quote -

Also, keep in mind that if you leave the employer, you are required to
pay the full amount back instead of simply making payments against the
loan. So, it may financially tie you to that employer even if you get
in a position where you'd really like to quit and find another job.
You may end up having to stay because you can't afford to lump sum pay
back the loan.

praxitek[at]gmail.com wrote:
- quote -

I agree with the advice of others. If increasing ARM rates prohibit
you from making your mortgage payment, that is a clear indication that
you have bought more house than you can afford. My rule of thumb is
that if you can't afford the payments on a 30-year fixed-rate mortgage,
you can't afford the house.

That being said, I will add to this discussion by saying that borrowing
from your 401k wouldn't help you anyway. If you take a loan from your
401k, you have to pay it back. And the term is usually pretty short.
At my previous employer, the term on 401k loans was 5 years unless you
used the proceeds to purchase a house, in which case the term was 20
years. So you'd probably end up with HIGHER payments.

--Bill

joetaxpayer wrote:
- quote -

about borrowing against your 401K. (Plese do not borrow against your
401K.) Along with what everyone else has posted you might throw into
the mix the following. Move into an apartment and rent out your house.
With the housing market heading down hill, this may NOT be the best of
ideas but if you are so desirous of owning that house...

praxitek[at]gmail.com wrote:

- quote -


- quote -

The direct answer to your question is that you may not use your 401(k)
as collateral for any third party loan. As Mark stated, "The IRS
restricts loans to a maximum of $50,000 or 1/2 the amount in your
account, whichever is less," but your question seems to ask if you are
permitted to go beyond your employer for a loan against your 401(k).

You are not allowed to borrow any money in that manner.

To John's point, borrowing more money will only make matter worse. My
best suggestion is to rent out a room or two. I gave this advice
yearsago to a single woman drowning in debt. Somehow this never occured
to her. 12 years later, she has no debt, not even a mortgage. And two
[now] friends who shared her house for 6 and 10 years.

JOE

<praxitek[at]gmail.com> wrote in message
news:1154848484.670323.114290[at]h48g2000cwc.googlegroups.com...
- quote -

The IRS restricts loans to a maximum of $50,000 or 1/2 the amount in your
account, whichever is less. (If 1/2 the account is less than $10,000, you
are allowed to borrow $10,000). This is spelled out in Publication 575:
http://www.irs.gov/publications/p575/ar02.html#d0e2452

This is the maximum allowed by law. As you implied, a specific plan can
have more restrictive limits (or not even allow loans at all).

Mark Freeland
BnetOnewsX[at]sbcglobal.net

In article <1154848484.670323.114290[at]h48g2000cwc.googlegroups.com> ,
praxitek[at]gmail.com wrote:

- quote -

Yes. Sell the house and buy a place that you can afford, or
rent until you can afford a home.

Your current situation is a message from above. Having problems
making your payments means that you are in over your head. It is
just a matter of time before something unexpected happens, and
you lose the whole thing.

Getting a 401K loan isn't going to help you. You cannot afford
the payments today, so adding yet more payments isn't going to
solve the problem. You will simply end up in the same place,
except without any retirement money, and a huge tax bill to go
with it.

Listen to the message, and solve this the right way and protect
your family's future. Sell the house, and dump any high-priced
luxury cars that you might have (ie, any that cost more than
$18,000 new).

-john-

--
================================================== ====================
John A. Weeks III 952-432-2708 john[at]johnweeks.com
Newave Communications http://www.johnweeks.com
================================================== ====================

Does anyone know if there are insurance companies or financial
institutions that would allow me to borrow 100% my 401K to avoid paying
early withdraw or penalties.

I'm on an ARM mortgage and I need to keep my house (before I loose it
to the bank). Therefore the only way I see doing so is to take my 401 K
out and paying the house off. However, I would rather not to do so.

Any suggestions!!!

Thank you,

Praxi