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Take 401K Loan to meet 20% down or pay PMI?

We are short by approx 40K (on a 750K home) to meet the 20% down requirement. We were thinking to put much as we can as down payment and then pay more than EMI every month to bridge the gap (to avoid paying PMI for a long time). However, couple of my friends recommended that we can get a 401K loan to put 20% down. Then use the money saved on PMI plus the "over the EMI" we were planning to quickly pay off the 401K loan.

I understand that the 401K loan comes at a higher interest rate than mortgage. However, does it make sense to pay high interest rate for a while so we can avoid PMI and get a slightly better interest rate on 30 year mortgage?

Thanks.

Edit: PMI should be paid until 22-24% (depending on lender) of the loan is repaid.

submitted by /u/pagetrip
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source https://www.reddit.com/r/RealEstate/comments/jlwntq/take_401k_loan_to_meet_20_down_or_pay_pmi/
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