I have a client in CA I am doing a loan for now facing the same questions. To decide if you want to take money out of your 401k you really have to ask a few questions - how much is in your 401K & how much do you want to take out? Then the next ? is how long will it take you to pay it back. Lender has to take into account the payment on that loan as well when figuring the details of the loan. If you are talking about a Line of Credit on your primary residence, you have to take similar things into consideration. There is the tax advantage there which is something to take into account. There is more to consider, but that is the basic starting point. Shoot me a message if you have more questions.