the only problem i see with that scenario is the house is in maryland. i wouldn't buy a house in maryland even if they threw in delaware for free. there's greener pastures out west homes, greener pastures.
guys please do some sanity check for me here..
currently I own a home in MD.
Rate: 2.125% 15 years
I am currently on my 6-7 years of the loan.
currently owe 141k
Current TSP rate is 2.375%
toying with the idea of taking out the max TSP residential loan to pay down the principal and refinancce to a 30 years mortgage. Is this a bad idea? I know it looks bad on paper, but I dont know why it seems like a good idea to me. Maybe I am thinking that the TSP home loan is a different type of interest accurring loan.
If I were to take out the loan I would pay 9-10k in interest in 15 years.
the only problem i see with that scenario is the house is in maryland. i wouldn't buy a house in maryland even if they threw in delaware for free. there's greener pastures out west homes, greener pastures.
100g
If you itemize your taxes, you would loose the mortgage tax deduction. You would also loose the earning potential from the money you take out of your TSP.
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I vote for bad idea. You have a great rate now, why complicate it & pay more in the long run? Sounds like you are looking at the payments or your monthly cash flow.
i've used tsp regularly to contribute and get free 5% fake gov future promise money, then take my contributions back out in form of loan, it's like doing the laundry only it pays better. my balance consists mainly of gov match money and i've spent all my contributions on hard tangible things of immediate and future value, copper and lead do not degrade over time with inflation, plus it's fun to appreciate them now. it is a conscious decision not to run the digital fake ones and zeros "money" treadmill. in fact, i am taking a 0% advance on a credit card right now to pay off my last tsp loan so i can borrow more in 60 days which i will use to pay off credit card advance, further my physical and career position with a move, and then buy more stuff and things. i came here naked, hungry, broken and penniless, and that is fully how i intend to leave. life is meant to be lived. chk chk.
100g
I took out a TSP residential loan but from what I recall, you can only get one if your home is a new purchase.
I agree with evilanne. I vote for bad idea.
Sounds like you took a 15 to get the mortgage completed faster, now you are reneging on that goal
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Curious as to why you are considering going to a 30-year loan when you only have 8-9 years remaining.
I think the only reason I would consider this is if I was having a difficult time making the payments.
Bad idea.
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