We'd usually lean toward the 401(k) loan here, for two reasons: cost and qualifying. - Cost and structure. A HELOC is typically variable, often carrying a short teaser rate before resetting to something like prime plus a margin, so the payment can move on you over time. A 401(k) loan usually carries a lower fixed rate that you pay back to yourself. - Qualifying, the big one. A drawn HELOC's required monthly payment (the payment showing on your credit report) counts against your debt-to-income ratio. A 401(k) loan repayment doesn't, because Fannie Mae, Freddie Mac, and FHA all exclude payments on loans secured by your own retirement assets. That difference can change what you qualify for on the new home. The catch to check before you commit: some 401(k) plans require you to repay the full loan balance quickly if you leave or lose your job, so confirm that with your plan administrator. And keep the distinction clear between a 401(k) loan and an outright withdrawal. The withdrawal is what typically triggers penalties and taxes, which is why we steer toward the loan. Every plan and every HELOC prices differently, so compare both options against your actual numbers, including how each affects your DTI, on the free Roadmap conversation before you decide.