401k loan/early distribution
You may want to look at cost here since you’re both not first time home buyers.
Is the 10% early withdrawal penalty along with the taxes you will pay on that withdrawal, cheaper than paying PMI for the two years or less it would take you to “aggressively* pay down the loan with the extra cash flow the new job will bring? Once you get the loan balance under 80% of the appraised value, the PMI goes away.
I would expect with a 35% raise combined with an early withdrawal which will add to your AGI that year, you’ll be in a higher tax bracket too. So that may be something to consider.
What I’ve done in the past is put 10% down on a house which resulted in PMI. This was a 90K loan on a $100K house. After two years I’d paid the loan balance down to about $86K. So I paid $450 for an appraisal. It appraised two years after I purchased it, at about $115K. 80% of that appraised value was $92K. So with an outstanding loan balance of $86K I was quite easily under that 80% threshold and the bank dropped the PMI.
401k loan/early distribution
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