401k Loan and Earnest

[Andrew T.]

Hi all,

A bit of a strange question. So we are under contract on our dream home right now. We wanted a prolonged closing because we needed some time to move and the sellers were willing to do it as long as we put down a large earnest deposit. The contingencies were in place so I'm not really sure why that gave them security but it worked for us.

We put down a $20k earnest deposit.

Our closing costs are estimated to be about $23k ($665k house). I have been thinking lately about using a 401k loan for closing and taking the $20k for REI investment purposes.

I know that if you use the 401k loan for first time house buying you can stretch it out to 15 years (obviously I would pay it back long before that) but this would give me some immediately capital to deploy.

Is there any way to do this since the $20k earnest is already in escrow?

I am not asking if 401k loans are a smart move as I already planned on using it as short term money for REI but at 5 years $25k is like ~500/mo where if I do it this way I get access to the money at $200/mo or so.

Thanks!