Have You EVER Borrowed Against Your 401K?

[transformer_99]

Take a look at Patrick.net before buying anything, especially in the SF Bay Area.

It's still a terrible time to buy. Real estate isn't a great investment over the long haul. Just read around that site. He's got so much in the way of evidence and facts and figures to back up his argument.

It's refreshing to see the National Association of Realtors' arguments cheerleading us into the bubble crash debunked for a change.

And there is so much information about renting and how rents are being affected in the current market. Rents are going down, down, down, down. Vacancies are rising, rising, rising, rising, especially in San Francisco. People in San Francisco are still in denial that people cannot afford $1,500 per month for a crappy 250 sq. foot studio anymore. There are no jobs that pay well enough for people to pay those prices anymore. Expect for things to get very crazy here in the SF Bay Area in the next couple of years. Expect the unexpected.

I agree, wait them out in foreclosure and bankruptcy. What is outlined there is exactly why the mortgage bailout won't work. Those that are in foreclosure, the one's without jobs, it doesn't matter if you bail them out to a mortgage that is 1/2 of what they got themselves into. They will still default because they either have no income or they will be so grossly underemployed that those mortgages and rents are still unaffordable.

 

[HellsKitchenmanNYC]

OK enuf w/the housing market already! lol. I'm finally off jury duty and got in touoch w/our finance people at work. Turns out if I borrow 3K from the 401K and pay back over 5 yrs w/interest it will cost me roughly 34$ per pay period. Doesn't sound like abad trade off for a bad situation now. And I can pay it off early too if i choose.

 

[killerb]

I borrowed against my 401K once, when I bought my first house. However, I repaid it within a few months. I wouldn't do it again.

 

[earllogjam]

Have noticed this as well and am puzzled by it.

Is there a lag between the time of the onset of a recession and a drop in rents? Or do rental costs not reflect larger trends?

Funny, I don't ever remember rent prices going down in the Bay Area. As long as there are good paying jobs here and buying a house is unaffordable the rent prices should stay level. Unless there is a flood of dirt cheap rental housing that comes on the market - which seems unrealistic at least in this area. Even with a deep recession and a 15% unemployment there still will be a 85% people who will be employed. Those people have to live somewhere.