If you want to purchase real estate and have an investment portfolio…you have options.
Very good options.
Before getting a traditional mortgage, the cost on using your investment portfolio as collateral is less expensive, easier, and quicker than using the real estate property as collateral (traditional mortgage).
And there are several advantages over a traditional mortgage:
- You can close a real estate deal very quickly (a few short days) to win a deal over another buyer who is using a traditional mortgage.
- Currently, it’s substantially less expensive, the interest rate is on the order of between 1.25-2.00% lower depending on the amount you want to borrow. Ironically, the more you borrow the better the rate when using your investment portfolio.
- There is no loan limit.
- It’s an interest-only loan making the payment substantially lower.
- There is no prepayment penalty.
- There are no processing fees, underwriting fees, and appraisal fees.
- Interest you pay is tax deductible against investment gains, interest, and dividends.
-Paul R. Rossi, CFA