Author Topic: Need advice on loan options, 401k vs swing loan  (Read 1255 times)

bigsur18

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Need advice on loan options, 401k vs swing loan
« on: January 30, 2018, 10:16:08 AM »
I am in the process of self building a home, which I was unable to secure a loan for.

I currently own a home, in which I have about 120K in equity.  The banks will not do line of credit or home equity loans because I will be selling my current home as soon as I build my house, which should be finished by June.

They are offering a swing loan, which is 7% interest, 1% of loan amount closing costs ($800-1000), and $1000 in other fees.  Turnaround is 60 days, which is a concern for my building schedule.

The other option I am considering is to take a withdrawal and subsequent loan from 401k.  I can get a $50000 withdrawal, of which $30K is taxable, or a $20k withdrawal, $10k of which is taxable.  I can then take a loan out up to $50,000 at 5.5% interest.  All available within 3 business days from start of each transaction.  As soon as house is sold I will be getting the money back in the retirement account as soon as possible.

My brain is filled with housebuilding concerns, so any advice would be much appreciated.

 

Wow, a phone plan for fifteen bucks!