I am looking to buy a home soon and instead of selling TSLA I was considering a stock based loan. I was curious if anyone has gone this route with their TSLA investment or another security and if they have any recommendations for a company to use or company's to stay away from. Thanks in advance.
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Security Based lending
- Thread starter blakegallagher
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bollar
Disgruntled Member
FWIW, I found a mortgage loan was substantially less expensive than any stock-secured loan offered to me.
Chickenlittle
Banned
My broker urged me too. The margin rate is not fixed and in rising interest rate environment you would essentially have a floating interest rate. For security, I chose not to have any mortgage and just pay cash. Ultimate piece of security
bollar
Disgruntled Member
Ah.
I would look first at a credit union that offers stock-secured loans and see what repayment terms they offer. My CU offers a max of 60 months. The payment factors into your debt-to-income ratio, so that may be a consideration.
Johann Koeber
Happy Owner
Likely your broker can turn your account into a margin account.
Please be sure you can cope with the risks involved:
A home is a long term investment.
TSLA will go up, but might go down temporarily. Then your loan might not be covered by equity and (in the worst case) you might loose all your TSLA.
The general rule is to finance long term investments with long term loans. Security based loans are usually short term.
Interactive Brokers is between 0.5% and 1.59%
Up until recently they did not give great leverage but I'm looking now and it's close to 3:1 overnight leverage you can get on TSLA if you have a portfolio margin account with them.
Up until recently they did not give great leverage but I'm looking now and it's close to 3:1 overnight leverage you can get on TSLA if you have a portfolio margin account with them.
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