You can't really cash your 401K while you are in chapter 13 and have the cash from 401k only apply to your your mortgage. Trustee has to follow the bankruptcy rules. Since you already lost your job and assuming
In the most simple terms, you are paying $3200 in points in exchange for $800 less interest per year (although this savings will drop each year as the principle balance of your mortgage drops).
I am assuming 5.50% vs. 5.00%
At the risk of oversimplifying, here are the key differences:
In a 401K you decide how much you will contribute and the amount that you accumulate is dependent on the investment returns you achieve as a result of the investment
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