Posted by Clint on October 07, 2003 at 03:13:58:
I have done this to purchase real estate. It’s no problem. I opened a credit line with a large bank and they loaned me 75% on my stock. They range from 70-75%. I would check around, banks vary on the ratio they will offer you. Also, the percentage depends on the type of stock [how risky they consider it]. They will hold it as collateral. I looked into borrowing from a brokerage account and the terms were much less favorable. I think they were lending more in the 50% range. The equity line is available just like a HELOC and at 1% above prime, interest only. The rate does adjust, of course, with the prime rate. I’ve found it an excellent way to leverage. You might not want to draw up to the maximum your credit line will allow because then they require principal payment. These are all the terms that I got… obviously it may vary.