Now that zero down payment loans are highly uncommon, some 9 percent of recent home buyers have borrowed down payment money from their 401(k), according to the National Association of Realtors. It allows them to take advantage of today's super low mortgage rates You can usually borrow up to half of your 401(k) balance, or a maximum of $50,000. Most loans have to be repaid within five years, but some employers will give you up to 15 years if the money is used to buy a home. According to the Mortgage Bankers Association, the loan won't count in your debt-to-income ratio when you apply for a mortgage because it's secured by money in your 401(k). The loan will also not be reported to the credit bureaus, so the debt won't hurt your credit score. There advantages to this borrowing, but think twice about doing it. First, apply for a mortgage that requires a lower down payment. An FHA loan requires just 3.5 percent down. Second, mortgage lenders are loosening up on down payments. More borrowers are going to traditional lenders because they have decreased down payment requirements. Lenders on the LendingTree online exchange have loans with down payments of 5 percent to 10 percent. With all low down payment loans, you'll have the added monthly expense of mortgage insurance premiums. It runs from .05 percent to 1.5 percent of the loan amount until equity reaches 20 percent. With FHA, the premiums are 1.35 percent for most loans and it lasts for the life of the loan. The downside of borrowing from your 401(k): * If you fail to repay the loan, it will be treated as if you made a taxable withdrawal, and you'll have to pay income tax on the balance owed. * If you are laid off from your job or quit, generally you'll have 60 to 90 days to pay off the outstanding balance. Otherwise, you'll also owe a 10 percent early-withdrawal penalty if you are under 59 1/2.