December 1, 2012

Be Like Zuck! Buy a house and pay 3/4% interest

121130-margin-rates

The secret to being rich is to start off rich.  Don’t believe us?  It’s true, and it’s how Mark Zuckerberg bought his house in Palo Alto.  Let’s hear from Burbed reader nomadic, who alerted us to this excellent opportunity. To go bankrupt!

Here’s the letter I got in the mail offering super-low interest rates on a loan secured by a stock portfolio.  The beauty of it is that the interest rate goes down the higher the loan amount – the opposite of what working stiffs get when they want a super-jumbo loan to buy a house in the RBA.  (Then again, the larger the stock portfolio, the smaller the risk?)

This must be how Zuck got his ultra-low interest rate on his mortgage.  Interesting that they don’t mention a mortgage in their “average loan rates” example.

121130-margin-zuckerbergThe headline above doesn’t say pay three to four percent interest.  It says pay three quarters of a percent interest.  Let me repeat that.  You can buy a house at 0.76 percent interest.  All you need is a sufficiently healthy stock portfolio to borrow at least $3.5 million against. 

Whoops.  All you need is an investment portfolio at this particular online brokerage.  For loans under $50K, you need to have twice that in your brokerage account.  With this firm.  But!  Remember about rich people getting richer? The more you have, the more you save. The more you have, the more you 121130-margin-callcan borrow, too.  If you “qualify” and have an account over $100,000, you could borrow against 85% of your assets.

Remember how well things went when anyone who could fog a mirror could buy a house for nothing down? This is an even better idea! Borrow against your investments, and if the underlying value drops, then you have to pay some of the money back immediately, or sell assets to cover it. Good thing you’ll have a bunch of equity in your new house that you could borrow against to pay back your brokerage account you borrowed against in the first place.  This sounds like a perpetual equity motion machine.

Open your portfolio, open your wallet, open your eyes, and we’re opening this thread to any topic you wish.

Comments (8) -- Posted by: madhaus @ 5:09 am






May 15, 2011

Trade Your Gift Cards in to Pay Your Mortgage!

Turning gift cards into mortgage payments

The Tech Chronicles, SFGate
Posted By:
Ellen Lee (Email) | May 11 2011 at 04:50 PM

Consumers with gift cards to spare will soon be able to use them to pay their utility, car and mortgage bills.

Plastic Jungle, a website where consumers can buy and sell gift cards, announced today it had partnered with ChargeSmart, an online bill payment service.

Wow, this is even better than gathering up all the pennies in my couch cushions to make the monthly nut!  I tell you I’ve been carrying around this stupid Jamba Juice card like forever.

So this is something that could work, trade in those useless birthday and holiday gift cards to pay to keep a roof over your head while your home value may make some adjustments.

And in case you think this means times are tough, don’t be silly!  This is innovative, just like the return of seller financing!  If the government won’t help, the free market will provide… um… something.

This is an open thread, but then again, al of them are.  Seen any good Open Houses?

Comments (3) -- Posted by: madhaus @ 5:35 am