3 ms·
Speaking of debt, tangential question for my own learning. Maybe founders do this with their own stock… let’s say I have a stock portfolio with X amount, could
by devmunchies 4y ago
Speaking of debt, tangential question for my own learning. Maybe founders do this with their own stock…
let’s say I have a stock portfolio with X amount, could I get a loan with my stock as collateral for a down payment on real estate?
That way I don’t actually need to sell stock to afford a down payment?
Would a bank shy away from that non-conventional loan assuming my portfolio is larger than a down payment and I make a good wage? Any googling collateralized stock shows me articles on making trades on loans from the stock broker, but not for using that money for something else.
- drewrv 4y agoThere are companies that offer loans like this but the rates aren’t great. Also mortgage lenders don’t like it if your down payment is debt. I believe wealthy people (so some founders) do this on better terms because they have a better negotiating position.
- devmunchies 4y ago> mortgage lenders don’t like it if your down payment is debt How would they know unless you told them?
- Panzer04 4y agoYou can certainly margin your stock and buy something else with the withdrawn money, often at very low rates (eg. 1-2% at IBKR), but that runs the same risk of automatic liquidation as all margin does.
- crystoloxy 4y agoYes, you can get a pledged asset line, a secured line of credit collateralized by your portfolio. A PAL is not for a particular purpose, so you can use it for pretty much whatever you want — other than buying securities. Random example: https://www.schwab.com/pledged-asset-line https://www.schwab.com/pledged-asset-line
- devmunchies 4y ago> Secured by assets held in a separate Pledged Account maintained by Charles Schwab & Co., Inc., you can use your line of credit to… What I expected, need to already have assets within Schwab