TSP Loan Question regarding Payback to TSP

[strangebrewsmith]

Hi,

I have never borrowed from my TSP but an opportunity has come up and it is now a consideration.

I can borrow the max from my TSP, 50,000, and with additional money-purchase a home.

The short-term 6 month max plan is to get a mortgage and pay back the TSP loan ASAP.

The bank is aware of the plan, the house will appraise for the mortgage loan. It seems there is no pre-payment penalty for the TSP loan.

My question is that people I know who have borrowed from their TSP never paid it back early, they just made the bi-weekly payments.

The house available is close to ours and they want a quick transaction and that's the only reason we are even considering a quick payback TSP loan. A conventional mortgage loan may take too long or may be delayed with current bank requirements.

If anyone has this experience or can offer helpful information regarding TSP lump sum payback, let me know.

Cheers!
Strangebrewsmith

 

[sillbeer]

I've only taken one loan out of my TSP and I did pay it back early. I will never borrow from my TSP again. It's a good deal if you want to use it as a source for personal loans and nothing else.

- Destin

 

[Bquat]

Hi,

I have never borrowed from my TSP but an opportunity has come up and it is now a consideration.

I can borrow the max from my TSP, 50,000, and with additional money-purchase a home.

The short-term 6 month max plan is to get a mortgage and pay back the TSP loan ASAP.

The bank is aware of the plan, the house will appraise for the mortgage loan. It seems there is no pre-payment penalty for the TSP loan.

My question is that people I know who have borrowed from their TSP never paid it back early, they just made the bi-weekly payments.

The house available is close to ours and they want a quick transaction and that's the only reason we are even considering a quick payback TSP loan. A conventional mortgage loan may take too long or may be delayed with current bank requirements.

If anyone has this experience or can offer helpful information regarding TSP lump sum payback, let me know.

Cheers!
Strangebrewsmith

Back when I was dumb enought to have credit card debt I borrowed. The difference of 18% to 5% I was making in the market made my choice and I liked how the money went back into my account as I paided it back. I still was able to put my 5% in for matching. But today with house loans less that 4%, I wouldn't do it unless it's the only way you can qualify. Also even thought you earn only about 1% in G fund you also get 5% matching of free money with 5% contribution. So what is the possible loss. 1% G, 5% matching and maybe 3% of more using this site for trading guidlines. Having your own house is great but borrowing against something that makes more you have to think about.

 

[Frixxxx]

Hi,
The house available is close to ours and they want a quick transaction and that's the only reason we are even considering a quick payback TSP loan. A conventional mortgage loan may take too long or may be delayed with current bank requirements.

Remember the requirement is the house must be your primary residence.

If anyone has this experience or can offer helpful information regarding TSP lump sum payback, let me know.

Cheers!
Strangebrewsmith

Any TSP Loan can be repaid earlier than the original terms by sending a check to TSP directly. Or, ENSURING you annotate your electronic transfer accordingly. But this is all provided to you upon being given the loan.

Also available here: Loans

 

[strangebrewsmith]

Thanks for the helpful responses.

Cheers!