Well before I make the big plunge I am in need of some help and second opinions are always handy. I am buying a home and must pay 20K in prepayment penalties and another 17K in closing costs. To get the montlhy payment I can afford on a
440K loan I will need to withdraw from my previous employers 401K plan. My plan is to pull out the minimum amount to cover the closing and to pay off car/visa debt that I am inheriting. If I pull out $40K (only 8K after tax) from my 401K how much will I need in mortgage interest & points to completely offset what is withdrawn from the 401K for the purposes to determine adjusted . The goal here is to NOT owe any fed/state tax. BTW I live in California. If I don't make this withdrawl for 1, I won't be able to afford the mortgage and secondtly I'll continue to pay up to 10% interest on the debt I've inherited. So if anyone has any brilliant ideas I'm all ears. Moderator: Please explain the nature of the inherited debt.