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Cash out 403(b) and Refinancing My Home?

I have $150K in a 403(b) and want to reduce my monthly mortgage payments. At this time, I pay $3100/month mortgage at 2.75%. Purchase price was $529000. Still owe $465000. Credit is excellent. Want to reduce monthly payments. Any advice would be appreciated.
  • June 12 2013 - Half Moon Bay
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Answers (1)

You don't mention if your payment includes tax/insurance, I'm guessing from the interest rate and loan amount you have a 15 year loan.   To lower the payment you could stretch to a longer term loan, however you will sacrifice quite a bit on the interest you will pay if you go this direction.

Generally speaking cashing out retirement accounts is not a good idea for a variety of reasons.   I would explore what you can qualify for first just on the current balance, and if the numbers don't work out well, perhaps brining your loan balance to 417,000 could open up some doors to better achieve your objective. You might also be able to look into borrowing against the retirement as opposed to cashing it out, to avoid tax penalties.
  • June 12 2013
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