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Security Based lending

Discussion in 'TSLA Investor Discussions' started by blakegallagher, Aug 27, 2014.

  1. blakegallagher

    Joined:
    Jul 21, 2012
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    Location:
    South Texas
    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.
     
  2. bollar

    bollar Disgruntled Member

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    Location:
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    FWIW, I found a mortgage loan was substantially less expensive than any stock-secured loan offered to me.
     
  3. blakegallagher

    Joined:
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    Location:
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    I was kicking around the idea of using the Stock secured loan for the down payment on the mortgage.
     
  4. Chickenlittle

    Chickenlittle Active Member

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    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
     
  5. bollar

    bollar Disgruntled Member

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    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.
     
  6. Johann Koeber

    Johann Koeber Member

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    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.
     
  7. TSLAopt

    TSLAopt Active Member

    Joined:
    May 20, 2013
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    1,009
    Location:
    Northern Cal
    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.
     

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