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mirage

Can You Get A Mortgage Without A House?

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Interest rates are at historic lows, much to our annoyance. Wouldn't it be nice to take advantage of this?

Wouldn't the best strategy for those with deposits but no house, to get a long term fixed mortgage at low rates now, and buy a house with it in a few years when they cost less (and interest rates have gone up)?

I don't know about here, but you can get sub 4% 30yr term mortgages in the US.

Could you get, say a loan secured on your STR fund for similar duration?

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If it isn't secured against a real asset as in Bricks and Mortar then it would be a speculative investment....

In any event whatever interest you could get for it on deposit would be stripped away x2 with what you were paying for the loan....

Not a good business plan in anyone's book.

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Interest rates are at historic lows, much to our annoyance. Wouldn't it be nice to take advantage of this?

Wouldn't the best strategy for those with deposits but no house, to get a long term fixed mortgage at low rates now, and buy a house with it in a few years when they cost less (and interest rates have gone up)?

I don't know about here, but you can get sub 4% 30yr term mortgages in the US.

Could you get, say a loan secured on your STR fund for similar duration?

You want a loan, and you are willing to put your cash up as collateral? Perhaps the bank will lend you 80% of the value of that cash to be safe. You won't be able to use your collateral until you have repaid though.

Why not go and see your local branch manager and see if you can get a mortgage without a house? Let us know how it goes. Better still post a video of it on YouTube.

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If it isn't secured against a real asset as in Bricks and Mortar then it would be a speculative investment....

In any event whatever interest you could get for it on deposit would be stripped away x2 with what you were paying for the loan....

Not a good business plan in anyone's book.

Reminds me of an old work collegue of mine. He took out a £5000 loan just to put it in the bank to earn interest. I tried to explain that it would be easier the just to hand a few hundred pounds straight over to the bank manager but he said he liked having £5000 in the bank. Weirdo.

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Reminds me of an old work collegue of mine. He took out a £5000 loan just to put it in the bank to earn interest. I tried to explain that it would be easier the just to hand a few hundred pounds straight over to the bank manager but he said he liked having £5000 in the bank. Weirdo.

During the credit boom, it was possible to get massive amounts of credit on interest free credit cards. Some borrowed tens of thousands, and just put the money in the bank.

The banks were the wierdos then.

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During the credit boom, it was possible to get massive amounts of credit on interest free credit cards. Some borrowed tens of thousands, and just put the money in the bank.

The banks were the wierdos then.

Interest free cash? I know they offered, and still do offer interest free on purchases but I wasn't aware they did it for cash advances.

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If it isn't secured against a real asset as in Bricks and Mortar then it would be a speculative investment....

In any event whatever interest you could get for it on deposit would be stripped away x2 with what you were paying for the loan....

Not a good business plan in anyone's book.

You secure it against the STR fund, like I said. I agree, it would be a very bad investment...unless interest rates shoot up and house prices drop in the next few years.

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You want a loan, and you are willing to put your cash up as collateral? Perhaps the bank will lend you 80% of the value of that cash to be safe. You won't be able to use your collateral until you have repaid though.

80%? What are they worried about?
Why not go and see your local branch manager and see if you can get a mortgage without a house? Let us know how it goes. Better still post a video of it on YouTube.

Bit busy for 2 months, but then I'll look into it.

Of course, I'm being a little playful here, this really amounts to an interest rate swap and I'm sure there are more direct ways to do it. Maybe shorting long term bonds.

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Interest rates are at historic lows, much to our annoyance. Wouldn't it be nice to take advantage of this?

Wouldn't the best strategy for those with deposits but no house, to get a long term fixed mortgage at low rates now, and buy a house with it in a few years when they cost less (and interest rates have gone up)?

I don't know about here, but you can get sub 4% 30yr term mortgages in the US.

Could you get, say a loan secured on your STR fund for similar duration?

you probably can if you use your cash as collateral. its essentially risk free for them.

but for it to be secured the bank would want to take ownership of your cash, like they would the title deeds of your house so youd need to find some kind of arrangement where you werent allowed to do anything with your cash.

but what you are actually talking about is hedging your position.

you can quite easily instead create and buy a financial product that would offset any interest rate rises in the exact manner that you are proposing.

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but what you are actually talking about is hedging your position.

you can quite easily instead create and buy a financial product that would offset any interest rate rises in the exact manner that you are proposing.

Yes indeed. But what's the best way? As I said earlier, shorting bonds, perhaps?

(and Bloo - thank you, yes it is)

Edited by mirage

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If it isn't secured against a real asset as in Bricks and Mortar then it would be a speculative investment....

In any event whatever interest you could get for it on deposit would be stripped away x2 with what you were paying for the loan....

Not a good business plan in anyone's book.

I think the idea is, borrow at 4%, put it in PIBs or Prefs at 8%.

If allowed it would work nicely for the first few. Until it hit the mainstream, and everyone doing it drives yields down - and possibly fuels a whole nother bubble.

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Interest rates are at historic lows, much to our annoyance. Wouldn't it be nice to take advantage of this?

Wouldn't the best strategy for those with deposits but no house, to get a long term fixed mortgage at low rates now, and buy a house with it in a few years when they cost less (and interest rates have gone up)?

I don't know about here, but you can get sub 4% 30yr term mortgages in the US.

Could you get, say a loan secured on your STR fund for similar duration?

What about a bit of forex trading leverage?

http://www.100forexbrokers.com/high-leverage-brokers

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Interest rates are at historic lows, much to our annoyance. Wouldn't it be nice to take advantage of this?

Could you get, say a loan secured on your STR fund for similar duration?

Banks do offer loans against cash or investment portfolios. It's a well used tax-dodge:

You have a large set of investments in an offshore portfolio.

When it comes to retirement, you would need to sell the portfolio and bring the money into the country, and therefore be liable for capital gains tax on any growth & income tax on the dividends received. This could be a substantial burden.

Instead, you could get a loan from a UK bank, secured on the offshore investment portfolio. No tax is due.

You spend the money, live a happy life, then cark it.

The estate is divided, and the loan to the bank is repaid, leaving nothing left for the taxman.

There is another alternative, and banks (mainly exclusive private banks) have been known to give mortages for the purchase of expensive heirlooms - I believe that Coutts once gave a mortgage for the purchase of a rare oil painting; the mortgage was secured on the painting, on the basis that, like property, it is not a depreciating asset.

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Banks do offer loans against cash or investment portfolios. It's a well used tax-dodge:

Hmmm ...

Maybe you can answer a couple of my longstanding questions.

Where would I go for an offset mortgage in which I could include my existing ISA as an offset account? Happy to transfer the ISA to the lender so they have charge of it. The idea being to access the value without having to cash it and permanently lose the tax break.

Extra karma for clarity about both cash and stocks-and-shares ISAs :)

And who would I go to for a mortgage backed by other securities? I imagine things like VCT investments which can't (yet) be sold without incurring a big tax penalty would work much like overseas assets for the purposes of such loans? Perhaps even rather better, in that the lender doesn't need a foreign lawyer to secure a charge over the assets.

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yes they are called loans... however a loan isn't secured against anything so there is a greater risk you will disappear to a different country and the bank is left with nothing... this means interest rates on loans are higher than mortgages as you have to leave the house if you scarper...

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Banks do offer loans against cash or investment portfolios. It's a well used tax-dodge:

You have a large set of investments in an offshore portfolio.

When it comes to retirement, you would need to sell the portfolio and bring the money into the country, and therefore be liable for capital gains tax on any growth & income tax on the dividends received. This could be a substantial burden.

Instead, you could get a loan from a UK bank, secured on the offshore investment portfolio. No tax is due.

You spend the money, live a happy life, then cark it.

The estate is divided, and the loan to the bank is repaid, leaving nothing left for the taxman.

The Michael Winner method!

Thinking this over a bit more, I think the hedge just amounts to shorting long bonds as the proxy for mortgage rates.

Very unlikely to actually do it of course, but surprised I haven't heard it discussed much given the number on here drooling over 3% rates when they don't want to buy yet and worrying about 15% when they do.

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Hmmm ...

Maybe you can answer a couple of my longstanding questions.

Where would I go for an offset mortgage in which I could include my existing ISA as an offset account? Happy to transfer the ISA to the lender so they have charge of it. The idea being to access the value without having to cash it and permanently lose the tax break.

Extra karma for clarity about both cash and stocks-and-shares ISAs :)

And who would I go to for a mortgage backed by other securities? I imagine things like VCT investments which can't (yet) be sold without incurring a big tax penalty would work much like overseas assets for the purposes of such loans? Perhaps even rather better, in that the lender doesn't need a foreign lawyer to secure a charge over the assets.

No. ISAs can't be used as security for a loan.

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  • 284 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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