Borrowing from a 401(k)?

Many young homebuyers cash out their 401(k) retirement plans and use
the money as a downpayment without considering the negative long-term
consequences: They can be hit with income taxes, a 10 percent penalty
triggered by early withdrawal and the loss of future tax-deferred earnings.
Experts say that even borrowing from a 401(k) plan isn't a good idea
because the holders of the retirement account lose tax-deferred savings and
risk selling investments before the stock market completely recovers. Instead,
buyers with steady sources of income might want to consider obtaining
piggyback loans, which combine first mortgages for 80 percent of the property
price and second loans to cover the remainder, minus the downpayment.
Those who decide to dip into their retirement accounts even after serious
consideration, should do so only if they can still make their regular
contributions as well as the loan payments.