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Personal Finances / Buying or Selling a Home


Subject:  Re: Downpayment Sources Date:  5/10/2013  6:54 PM
Author:  TMFPMarti Number:  125244 of 128887

But it is true that you're basically paying twice on the interest portion.
But that IMO is a minor consideration, and the "you're paying taxes twice" is a phrase that is more designed for an emotional impact, rather than logic.

Well, excuuuuuuuuuuuuuuuuuuse me. I stated it as blandly as I could. I'll grant your "minor consideration" as an opinion you're entitled to, but I'll not have you mischaracterizing my remarks, which were strictly educational and meant to counter the numerous statements one sees with regard to these loans that "you're paying yourself."

Personally, I look at it as two separate sides.
1> I'm making an "investment" in my 401k into a "bond" that pays X% interest. And that bond is a "low risk" bond (because I believe I'm going to make the payments.

Huh? You may choose to look at it this way, but I see it as paying pocket A with cash from pocket B, both pockets belonging to you, thus this "investment" yielding bupkes. Make enough of those investments and you'll be broke. As for the risk factor, I should hope that any time you buy any bond you believe that the debtor will pay up.

2> I'm getting a loan and paying X% interest on that loan. And the loan must be repaid almost immediately if I leave the job (either voluntarily leave or fired)

If I'm happy with both of those (or think the downside of one is more than compensated by the upside of the other), then it's a reasonable choice.

I agree. I just like fully informed decisions.

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