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Using money from my 401k to pay off my mortgage

By Terry Savage on September 14, 2020 | Housing / Real Estate

The mortgage on my condo has a balloon payment of $150,000 due in Jan 2021. What are the pros and cons of taking $100,000 from my 401k under the CARES act to use toward the balloon payment? There is no interest, no penalty and it allows payback in three years. I understand that I am losing the investment growth on the $100,000, but it will free me from the fees and the 4% interest rate on a refinance. I have the cash to pay off the additional $50,000.

Terry Says

Don’t take the money out of your 40l(k). Instead if you are still working start applying to refi that loan NOW! Rates are low, and who knows where they will be in a few months. Just get it done, and then pay extra on your mortgage to pay it down. But keep some cash in reserve for emergencies.

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