| Home Equity Lines of Credit vs Margin Borrowing |
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sagetips
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Cash: $ 1.00
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Joined: 14 Jun 2004
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| Home Equity Lines of Credit vs Margin Borrowing |
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Hi. I know some people use their home equity lines of credit for investment purposes and I also know that experts like the securities dealers association strongly recommend against doing this. But I also know that the same securities brokers offer margin borrowing that can lead to trouble just as sure as imprudent use of a HELOC. I've never used either form of borrowing for investment purposes but am thinking about it. I'm wondering if anyone has thoughts on the pros and cons of using one or the other forms of debt for investing. Thanks.
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Sun Jun 27, 2004 7:37 pm |
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Andrew
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Location: Texas
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Seems to me the main issue here, is the risk.
If you borrow against your house and make a 100% profit with the loan, then you obviously made the right choice. But, if things go sour on your investment and you lose it all, you are going to pretty frustrated paying on that note. Many people do what you are proposing with their equity loans or equity LOCs, and some lenders will even list investing as one of the possibilities from the equity loan or line they are pushing, but ultimately it is a gamble.
Are you willing to bet the house?
http://www.bankrate.com/brm/news/mtg/20000511.asp
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Tue Jun 29, 2004 3:34 pm |
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