Re: TSP Loan Advice
See Boghie's post first - I'm speaking from the Civilian side
1) If you do this you put on the silver handcuffs (I am wearing a pair - I have a real estate loan out) - you have to stay in the military/government service while the payments are deducted from your pay, or you have to pay it all back. If you are thinking about a civilian job in the Federal Government post-military, as a military veteran you do have an easier time getting a job - but that implies there is one available and many Departments have a hiring freeze. The calls for 5% cuts in civilian personell pending in Congress make staying in Government service even after a job possibly risky - so careful. Often it's last in first out in the federal government, especially with all of the early retirements we are losing knowledge faster and faster and they want to keep us middle aged folk around.
2) If you do this, either keep your credit card accounts open and break your credit cards (best action) or keep one in reserve in a place that is inconvinient to get to (if you need to have it in reserve) - just make it so it's not easy to just pull it out of the wallet. Also see Frixx's posting on too many credit cards - try not to close the one you've had the longest (because it shows you have a credit history) but watch the percentage interest (your oldest card may have the highest interest rate so you may have to keep it open but break the card - that's where I am).
3) Yes, indeed, a TSP loan will not show up on your credit report. But keep in mind, if you get a loan based on the credit score you get with the hidden loan, the person supplying the loan you are getting isn't going to know about the TSP item either. You will need to adamant about how much you can afford per month and how big the loan is going to be, no matter what. In addition, if you choose not to tell the lender about the TSP loan (I do not recommend this if you are getting a home loan due to the need for paperwork to get the TSP residential loan) they are going to assume you have more money per month than you do. Plus, some lenders are overly optimistic about how much you can afford per month.
4) If you do take out the TSP loan, one of the plus's you have over other buyers is you will have the down payment in hand, and you can be flexible about when you take possesion (if you have to sell the house you have, there's a problem). You may not be able to get a better price due to the California housing market price deflation like I was able to, but the person with down payment in hand looks better than the one who has to make sure of the sale of their house first. Also, your flexibilty for moving dates can help, moving from one house to the other makes life difficult with the moving date coordination.
"All the prophets of Doom, Can always find room, In a world full of worry and fear..." - Protest Song, Monty Python
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