/biz/ - Business & Finance

[Anonymous No.50369957]

>mortgage company says my equity in my home is $300k
>know for a fact that it's closer to $250k and they're over-estimating the value of my home substantially
>they're offering me up to $150k in HELOC
>2.5% mortgage interest rate
>3.5% HELOC interest rate
Am I retarded or are they basically offering me free money? The extra 1% is pennies on top of what I'm already paying on the mortgage, and even if the housing market goes tits up, it means I now have a shitton more cash to continue making minimum payments on while scooping up cheapies. The only way I see losing is if all markets go flat/negative this decade like in the 1970s, but with most markets already down 30% or more, that doesn't seem too likely.

[Anonymous No.50369994]

>>50369957
>HELOC
I mean home equity loan, derp.

[Anonymous No.50370003]

>>50369957
The latin of the word "Mort" is death. And "Gage" means offer. A mortgage is a death offer. Do you understand?

[Anonymous No.50370017]

>>50370003
Already have a mortgage and it's quite comfy.

[Anonymous No.50370058]

yes, they are offering you free money
no hidden things that could screw you the fuck over... no champ! Lucky you

[Anonymous No.50370115]

>>50370058
It's a fixed rate for the home equity loan and there's not even a prepayment penalty. I feel like there's got to be an obvious catch (maybe I'll call them and the next day they'll call back and say "Whoops actually your home equity is only $250k after all") because otherwise this seems like an obvious source for the next big capital injection, all those boomers and gen x'ers taking out big home equity loans to fuel the next market rally, while rentoids continue to seethe.

[Anonymous No.50370269]

>>50370115
go for it champ! Very cool wall of text!

[Anonymous No.50370299]

>>50370115
if the value of your property goes down you might have an obligation to make additional payments. read the fucking contract

[Anonymous No.50370342]

>>50369957

[Anonymous No.50370397]

>>50370299
Not in this case, it's a fixed loan.
>>50370342
That's the exact opposite situation. I have a mortgage with substantial equity, and they are quoting a high price to convince me to hold a mortgage for longer.

Unless that's your point? You're saying that housing prices are about to go up? Because if that does happen, I'm only out the extra 1% interest on the second loan which I other could have had appreciate. Not to mention my home equity goes up regardless because I will still have close to 20% down even after taking a max loan.

[Anonymous No.50370413]

>>50370397
>Not in this case, it's a fixed loan.
if you cant pay the bank gets your house. if the value of your house goes down the bank might want to have more securities to back your loan or rates will increase (but its called different)

[Anonymous No.50370458]

>>50370413
>if you cant pay the bank gets your house.
Obviously. But even if I lose my job the moment I take the loan, the loan itself is worth at least 2 years of payments, interest, and cost of living. And as I said, I have plenty of liquidity to survive even longer without income and the mere extra 1% on $150k.
>if the value of your house goes down the bank might want to have more securities to back your loan or rates will increase (but its called different)
In this particular case it's a fixed loan because it's still fundamentally backed by the first mortgage. You might be European but in America 99% of home mortgages are 15/30 year fixed mortgages.

[Anonymous No.50370518]

>>50370397
>You're saying that housing prices are about to go up?

I couldn't guess either way and I don't know anything about US mortgages. Somebody I know is trying to convince someone else I know to sell now because she's up $600k, housing market is definitely in euphoria stage which leads me to think they'll crash at any point, but it's also clown market and houses (for now) seem to be the safe asset of choice for investment firms.

I'm a smallprint / legal autism type of guy so I'd advise you get a copy of the terms and conditions and really comb through it, maybe ask a professional to point out any blatant disadvantages hidden in there, which I'm assuming they are. The banks and usurers are not your friend, they wouldn't be offering something if it didn't benefit them somehow. It would be hard for me to resist a cash injection to beef up my portfolio in preparation for 2025 though.

[Anonymous No.50370648]

>>50370518
>The banks and usurers are not your friend, they wouldn't be offering something if it didn't benefit them somehow.
They're still making more money off of me by effectively extending my mortgage and increasing my interest rates a little. In a time where the average for new mortgages is around 5.5%, it makes sense that they want to make those of us with 2-3% mortgages add more to their cash stream.

Naturally, this can't go on forever, if everyone piles on more debt cash will be king again, but I'm saying that it seems like home equity loans are going to be taken more often in the future, and to profit from the inevitable bubble that creates, taking one now would be as good a time as any.

[Anonymous No.50371076]

>>50369957
What fucking retard drew this? That's not a checkmate.

[Anonymous No.50371109]

>>50369957
Congrats anon, you've stumbled across the secret to free money. I am so, so excited for you.
As your zestimate continues to grow indefinitely, the bank will offer you access to even more riches.
And this should go without saying...but if a nigger of color inquires about this little trick, you tell them get a job, yeah?

[Anonymous No.50371140]

>>50369957
>that board position
People who don't know chess and can't even use a real game as a guide when making art/tv/movies is so triggering.

[Anonymous No.50371149]

>>50371076
Bishop covers the white squares, others are blocked by pieces, knight can't be taken and duly delivers checkmate. It turns out you are, in fact, the idiot.

[Anonymous No.50371258]

>>50369957
>free money
no, they're offering you a six figure line of credit that's collateralized by unrealized gains of your house. it's not free and it's not money, it's a massive amount of debt.

[Anonymous No.50371315]

>>50371149
Bishop d5-e8, rook c3-g4, then O-O-O castling and white already has major advantage on the queen's quarter, going for Traxler in 6 moves.

[Anonymous No.50371359]

>>50370115
It increases their chances of repo-ing your house due to defaulted payments
Houses need to have fuck all in equity on the balance sheet compared to loans because they're the safest asset since ever.
Also, loans are higher rates than mortgages and thus they can more than double their income from you "for that new addition!" Or whatever bullshit they're selling now

[Anonymous No.50371401]

>>50371076
That is a checkmate.
>Bishop prevents king from moving
>Can't take out the bishop with your queen while in check from the knight
It's checkmate.

>>50371315
Or white could've just put his bishop to attack the knight guarding the black king, and then used his queen to take it. But at the same time the black bishop/rook are still in play, so it's possible that would have to be dealt with.

[Anonymous No.50374315]

yeah sure of course anon. these bankers are definitely looking out for you and offering you free money. they are not trying to suck some extra blood out of you at all. they are good people looking out for the community

[Anonymous No.50374391]

>>50371140
What's wrong with the board position?
>>50369957
Yes, this is your golden opportunity to rug-pull the bank. However, invest your loan wisely in something likely to make better than 3.5% returns with low risk.

[Shit thread No.50375776]

>>50369957
Please do not post these weird pictures.
>The only way I see losing is if all markets go flat/negative this decade like in the 1970s
Exactly, are you willing to take the risk? Personally I think that there is a 60% to 70% chance of brutal stagflation with high interest rates. If you lose, you are basically margin called on your primary residence.

>>50370115
>rentoids
Feel free to kill yourself, if you want.

>>50370518
>I'm a smallprint / legal autism type of guy
Based.

[Anonymous No.50376917]

>>50371258
I guess what I'm saying is that by substantially overestimating the value of my home, such a loan may as well be a realized gain.

[Anonymous No.50377040]

>>50369957
>Take HELOC
> Do not Draw or Payback initial draw
immediately

you are literally retarded if you do not take this. Even as just insurance. They will close it on their own, or block draws when/if marget gets bogged.

[Anonymous No.50377156]

>>50376917
Take the money and invest it in something low risk, like REITS or a broad biotech etf while selling covered calls. Calculate out the expected returns on the reit dividends and covered calls, and make sure it is higher than the yield of the loan.

[Anonymous No.50377415]

>>50376917
you are not realizing any gains. they just want you to take out more money so they make more money in interest... it's not that difficult to understand sweetie

[Anonymous No.50377458]

>>50370003
lmao you chuds do everything you can to not make it

[Anonymous No.50377487]

>>50369994
Yes, anon, we all know what a HELOC is, if you had to write it out you are not that smart, or asking this question.

>>50370058
This guy is 100% correct.

All this talk about the loan and how the loan is structured but no talk about how you'll spend it on.

What shit coin are you going to buy, anon?

[Anonymous No.50377576]

>>50377415
why does that necessarily mean op loses?
this is a massive amount of incredibly cheap capital and op presumably isn't a nigger who will actually default
cheap credit literally is free money as long as you don't run the risk of liquidation and have patience
the only reason to turn it down is if you're an impulsive niggerbrain who's first thought would be to go out and finance a mercedes or something

[Anonymous No.50377586]

>>50369957
>>50369994
Johnson and johnson bonds pay 5.5% apy, you could invest the money in those and take the difference for free.

[Anonymous No.50377611]

>>50377576
yes, you should take out maximum money at 3.5% interest rate
nothing can possibly go wrong, you are correct

[Anonymous No.50377651]

>>50377611
Yeah, it's literally a lower rate than johnson and johnson bonds.

[Anonymous No.50377681]

>>50377651
and as we all know, investing in johnson and johnson bonds is risk-free

[Anonymous No.50377723]

>>50377611
yes this is literally the case see >>50377586 and the hundreds of other similar options
if op is right and this is a fixed rate it quite literally is free money
all you have to do is make the minimum repayments

do you not understand that the american financial system exists to make the rich get richer? they are hoping op goes out and insantly wastes all this money nott hat he invests it - the overwhelming majority of people would waste at least 30% of it
ok sure there is the risk that he invests it and whatever he invests in collapses but then he is probably fucked anyway assuming it was a safe investment, which leveraged ones should be, and so is everyone
plus housing will collapse too in this situation

[Anonymous No.50377767]

>>50377681
Pretty much. They are a massive multinational corp with great finances and have been known to pay all their debt obligations on time for the last 50 years or more. They have a better credit rating than the US government.

[Anonymous No.50377802]

>>50377586
Also sorry, the apy is actually more like 3.7% to 4.4% though. Still better than your heloc.

[Anonymous No.50377813]

>>50377723
?? i do not understand why you are responding to me in such an argumentative fashion
yes, 3.5% interest rate is free money
take the free money and put it in the stock market
the stock market is guaranteed to go up now that we have dropped a bit
this is a risk-free plan

[Anonymous No.50377832]

>>50377586
>>50377651
>>50377681
Retard here. How did one access corporate bond markets? There are a number of firms in wouldn't mind buying debt from but never really know how. Would you do this through your typical brokerage account? Pic rel is company I wouldn't mind buying their debt as well

[Anonymous No.50377839]

>>50377813
>put it in the stock market
>the stock market is guaranteed to go up now that we have dropped a bit
>this is a risk-free plan
Dude.... put it in corporate bonds instead, don't margin gamble your house unless you don't mind losing it.

[Anonymous No.50377867]

>>50371076
Unless the white king uses a substitution jutsu, there no way to avoid checkmate by Nh7, the knight cannot be taken by any white piece, and the king has no available squares to move from the check since the bishop in h5 does not allow white king to move to either of his two available squares (e8 and f7)

[Anonymous No.50377870]

>>50377832
Just open a bond brokerage account, as you would a stock brokerage account.

[Anonymous No.50377927]

>>50377870
Kek. Maybe I shouldn't if I'm this retarded. Probably should stick to stacking historic toilet cleaning supplies. Damn I'm retarded. Thanks Desu.

[Anonymous No.50377996]

>>50369957
is the rate fixed? might be trying to tempt you into some low IQ bait to jack up your rates this fall

[Anonymous No.50378003]

>>50377813
you don't understand what bonds are
you know banks borrow money then lend it out at higher rates? it's the same
but regardless
>the stock market is guaranteed to go up
in the fullness of time yes it is
even if it doesn't in real terms and it's just inflation driven
this isn't a one year gamble loan op only has to repay the minimum and stay above water for five-ten years before they almost assuredly come out on top
even the nikkei 225 would've done so eventually and that is the example of a stagnant economy
your options aren't fixed either and if you can't average 3.5% apy then give up investing
if you never take any risk whatsoever then you don't get rich
it's ridiculous to me that on /biz/ of all places we have dave ramsey acolytes

[Anonymous No.50378018]

>>50377839
>don't margin gamble your house
thats a funny but accurate way of putting it

[Anonymous No.50378053]

>>50369957
this is basically what robert kiyosaki does, he owns like 6k properties
as you get richer banks will give you low interest loans so they can cash in on your success because to them they are literally getting free money when its practically risk free or backed by appreciating assets
also what all the billionaires do
they will even go on TV and spout how they want higher taxes on the rich because they do not actually have those taxable events in the first place so it is free PR

[Anonymous No.50378107]

>>50378003
yes, i agree
it is free money
no risk
dont know how many times i have to repeat myself..

[Anonymous No.50378423]

>>50370648
>they are giving me free money
>they are also making money
Not how it works

[Anonymous No.50378733]

>>50378423
>Implying the bank never makes mistakes
>Implying the bank never makes less money than it otherwise could have
>Implying the bank always has a bigger risk appetite than you