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Subject:  Re: The downside of 401k loans... Date:  2/11/2015  3:00 AM
Author:  BlueGrits Number:  309023 of 312949

I don't know if this an option for you or not, but there are some pretty good 5/1, 7/1, and even 10/1 loans out there now -- even ones which are interest-only during the fixed rate period. You could take out one of those, pay off both existing loans, have a lower monthly cost, and have some time to get yourself stabilized financially. Once you reach that point, you can build up some cash reserves then refigure your strategy.

My position is different than yours, but here's what we did:

A couple of years ago, I swung a great deal on a 10/1 ARM at two and seven-eighths interest only. Our monthly payment dropped to about $360/mo. and the savings on mortgage payments go into our Roths.

We'll both be at full retirement age (about year 8 of the 10-year period) and are set up to do any of the following:

- Keep going with the loan (it has a 4 and 7/6 *total* cap after year ten).
- Refi.
- Sell the house, take our equity, and go elsewhere.
- Pay off the house with the savings and earnings we've realized from them.

I don't know all the qualifications & hurdles involved in using those types of loan instruments, but we seemed to sail through them pretty easily....
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