Bichon Frise wrote:
I think it is a horrible idea:
-don't forget the opportunity cost of investing
-mortgage interest is tax deductible, so you would essentially be loosing the tax deduction
-if you are to loose your job for ANY reason, you will most likely have to pay it ALL back within usually 30 days (rules vary plan to plan)
Why not do a no cost refi into a 5 or 7 year ARM?
I agree with Bichon Frise on all points. Especially point 3 about the 30 day payback. I know someone who had this exact same thing bite her real bad. She didn't even lose her job. Her company was bought out by a bigger company and when they moved her over to the new payroll system she had to pay back the loan IN FULL within 30 days.
As far as the 5-7 year ARM idea, I would probably just pay your current mortgage. Yes, rates are low. Yes, they will most likely stay low. But I'd be willing to "pay up" to keep the certainly you already have.
Let me just reiterate this one more time. On a scale of 1 to 10. 10 being a great idea, 1 being a horrible idea. Paying off your mortgage with a loan from your 401k rates about a negative