Borrowing out of 401k for Primary Residence Mortgage

[AdamLX]

Just a quick sidenote on buying a condo. Wherever you look to buy, double check to make sure the condo association is approved with Fannie Mae or FHA depending on the route you take (especially if not putting 20% down).

[mstng86]

Just a quick sidenote on buying a condo. Wherever you look to buy, double check to make sure the condo association is approved with Fannie Mae or FHA depending on the route you take (especially if not putting 20% down).

I never understood something. What happens if the building is foreclosed on with tenants still in it? I mean, you bought a condo, but the building is foreclosed on, so how does that work?

I am thinking more about the lofts downtown. Buildings foreclose every now and then. What if it is one that is made up of condos?

[propellerhead]

I figured, just reiterating. Dallas just doesn't seem to be a condo market. I've only seen one condo appreciate at all (it was in Uptown), while the rest have lost value (most significant amounts up to and including half). Even when it's paid off you're still paying an expensive HOA fee along with taxes and insurance so the low overhead doesn't necessarily apply. You can buy a house and pay someone $20/week to mow it ($80-100/month on yardwork is cheaper than any HOA I've seen on a condo). People get excited when they see a nice condo for $60,000, but when you add the $400/month HOA payment you end up with the same payment as a $150,000 house. The big difference being when the house is paid off that extra $400 goes away. The HOA will never go away and will likely increase.

Ultimately it's where you live and your happiness outweighs a few hundred here or there (be it HOA or yardwork), but you mentioned doing this to save money and I just cannot see a condo being that vehicle.

This.

I realize we're off topic already but that's the same thing a realtor told me a few years ago when I wanted to get out of apartment living. People in Texas want sprawling houses. It's cheaper and we have the land for it. Condo values don't go up and it's hard to sell them. If we were in Chicago, San Francisco or New York, a condo might be a good investment. That is why I ended up in a house with a small yard and TOMMY's Landscaping doing all the yardwork.

[talisman]

Actually, we might as well go off on a tangent. I am noticing that HOA dues for condos have significantly increased since I sold mine 6 or 7 years ago. Which puts total out of pocket into house range for a decent condo. Thinking I'll probably go ahead and spend a little more than I intended and have a 2 car garage and my own hot tub to enjoy.

[propellerhead]

An attached garage is really nice when it's freezing outside or when the ground can fry an egg.

[Broncojohnny]

If you want to be in a condo, do it in uptown Dallas. You'll say I'm crazy and I would have agreed until not long ago. Then I started working in that area. There is more hot ass down in that area of town than any sane man can comprehend. It's fuckin crazy.

[AdamLX]

I never understood something. What happens if the building is foreclosed on with tenants still in it? I mean, you bought a condo, but the building is foreclosed on, so how does that work?

I am thinking more about the lofts downtown. Buildings foreclose every now and then. What if it is one that is made up of condos?

The issue you will have is that you will lose all the benefits you've been paying for with your HOA (usually the HOA that files BK). If the building is not completely sold and the ownership not turned over to the HOA yet, then the lienholder can buy the remaining units.

You won't lose your condo or anything, but you can't bet you will either pay a whole lot more in fees or you will lose all the common area maintenance etc that you have been paying for monthly.

[Broncojohnny]

All that foreclosure stuff gets complicated with condos because the HOA may not be run by the building owner. As Adam said, title to your unit isn't going to be at stake but everything else will be. Depending on legal technicalities, you could lose things like prepaid rents, assigned parking spots, maintenance staff, etc. When a bank loans on commercial property they typically try to get out of being liable for that stuff as a condition of making the loan.

[talisman]

The biggest problem I've got is that the type of property I want doesn't really exist. Less than 1500 square feet, 2 car garage, 2 bedrooms, tiny yard, dirt cheap, and not in a shit neighborhood. It's the not in a shit neighborhood and the square footage that are giving me problems. Most people want bigger houses. I would be perfectly fine with something in the 1200 or less square foot range, but I don't want to have to sleep with an arsenal next to my bed.

[kingjason]

If you want to be in a condo, do it in uptown Dallas. You'll say I'm crazy and I would have agreed until not long ago. Then I started working in that area. There is more hot ass down in that area of town than any sane man can comprehend. It's fuckin crazy.

I lived over by SMU for a year and you are 100 percent correct on that whole damn area.

[slow99]

The biggest problem I've got is that the type of property I want doesn't really exist. Less than 1500 square feet, 2 car garage, 2 bedrooms, tiny yard, dirt cheap, and not in a shit neighborhood. It's the not in a shit neighborhood and the square footage that are giving me problems. Most people want bigger houses. I would be perfectly fine with something in the 1200 or less square foot range, but I don't want to have to sleep with an arsenal next to my bed.

I know where that exists, but its in Dallas.

[talisman]

I know where that exists, but its in Dallas.

Well, yeah. I'd like to stay in North Arlington. Too many ties to this area.

[maikoD]

Blah blah blah, spam spam spam.. Fuck off and die spammer.

[GE]

When unexpected financial situation comes up, and then you suddenly need cash, one option may be to consider is to take a loan from your 401(k). Many Americans are doing it, but most of them default on loans they have taken out from their 401(k) plans. A lot of them are not able to pay back the loans, as the number of 401(k) loan defaults have been increasing. Get more information here: 401(k) loan defaults.

Get fucked.

[petyweestraw]

Well I did this when I bought my house four years ago. If I had to I'd do it again. It's my money and I payed it back to myself with I think 2% intrest but that is also mine. Didn't have to deal with a bank and more credit out against me Wich helped keep my house intrest lower.

I was still able to contribute to my 401 also. Called and they applied the funds to my bank the next day. Also there is no tax to pay on it.

The other route if you don't want to pay it back is to tell them it's for a home purchase. That route you would have to pay taxes on it. They could take it out then or you have to option to pay the taxes yourself later. I didn't go that route as I wanted to put it back.

Hope this helps and good luck on the next home

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