Jump to content
House Price Crash Forum
Sign in to follow this  
Dr Doom

Gold Mortgage

Recommended Posts

If I want to buy £200,000 of gold is there any good reason why I shouldn't be able to

obtain a mortgage to buy the said gold?

Assuming I can put down a 20% deposit and am willing to pay for insurance, protection,

storage, etc. Would a bank lend me the money?

Share this post


Link to post
Share on other sites
What if I want to sell later on, are dolls houses subject to stamp duty?

why dont you just stick 200k on chelsea to beat derby next season? could net you 20%, which would be 40k :lol:

Share this post


Link to post
Share on other sites
its called the futures market and you need a 10% deposit, you dont have to worry about storage either.

But isn't the Gold Futures market a leveraged position on "non-allocated" gold? I think he is talking about borrowing the money to purchase "allocated" gold (i.e. he'll own gold bullion in a vault somewhere, with a specific weight from numbered units allocated to him), and securing the borrowing on this gold. For this, he obviously WOULD need to pay storage and insurance costs, so would be betting on capital appreciation of the gold.

Share this post


Link to post
Share on other sites
But isn't the Gold Futures market a leveraged position on "non-allocated" gold? I think he is talking about borrowing the money to purchase "allocated" gold (i.e. he'll own gold bullion in a vault somewhere, with a specific weight from numbered units allocated to him), and securing the borrowing on this gold. For this, he obviously WOULD need to pay storage and insurance costs, so would be betting on capital appreciation of the gold.

Yes that was the idea.

Do you really think the banks would be cool with that?

Share this post


Link to post
Share on other sites
Yes that was the idea.

Do you really think the banks would be cool with that?

No.

The closest I've managed is circa £5k on 0% credit cards that I used to buy gold & silver numismatics last year. With transfer fees, it costs 3% interest per annum.

Share this post


Link to post
Share on other sites
What would be the official line though?

Maybe I should just go see a FSA and get the answer from the horses mouth.

Dr Doom: Hello, I want to get a mortgage to buy gold.

Bank Manager: Is that a new development? I haven't heard of that one

Dr D: No, physical gold, the metal

Bank Manager: Oh. Sounds dangerous. You wouldn't like a nice safe house then? Their value always goes up.

Dr D: No. Gold. It's shiny.

Bank Manager: But houses are made of fired sand. And you get a little plot of land.

Dr D: But houses are overvalued. Gold, in inflation adjusted terms, isn't.

Bank Manager: There would be the small matter of collateral

Dr D: I could house it in your vaults, I'd pay the charges.

Bank Manager: Ah. We don't have them any more. It's all paper now. Brain work, knowledge economy, you see?

Dr D: OK. You own the gold legally, we'll house it at Brinks, I'll pay the storage

Bank Manager: No, we couldn't possibly do that. What if it drops in price?

Dr D: OK. 50% mortgage. I'll put down £100k, borrow the other half

Bank Manager: Security!

Share this post


Link to post
Share on other sites

I am very bullish on gold and have purchased quite a large amount for someone of my income bracket, but I would never advise anybody to borrow to invest, unless you have some special inside information about a comet hitting the earth/ thermo nuclear war/ zombie invasion/ alien attack or impending currency collapse.

Though I feel that a currency collapse due to the expansion of money supply could at some point push gold up to a much higher value, maybe even combined with the peak oil problem in the not to distant future, I just don't think borrowing to invest is ever a good idea because WE/I could be wrong, they could come up with a new form of energy that replaces oil (I know that's highly improbable, but imagine what that would do the USA trade deficits and economy if it was the USA that came up with it and was the only supplier)

I don't think that the US will manage to sort their economic and energy problems out, I also don't think the UK will get a grip of its problems, gold may turn out to be an effective store of value, and in the rare event of a currency collapse it may become a lottery ticket that also actually has an intrinsic value.

I have put my money where my mouth is by investing in gold but I also have an vested interest in talking it up, (though at this moment I am still buying, so may be good to talk it down a little) just don't ever borrow to invest. The Gold thread that we have on here has plenty of good links and info about gold and the reasons why a person could consider investing, just don't get swept up in the hype. It took me a year of research before I made the move into gold, I feel confident and am not worried by the ebb and flow of the daily price. If your going to be in gold, be in it for the long term, don't expect to buy 10 ounces and for the currency to collapse the following week.

Now more importantly, for £200,000 you could buy one thousand, six hundred and fifty two 10 gram bars of gold, if you get a good polish builder you could make a dolls house out of them and according to our friend the estate agent the price of 'houses can only go up!' compound that with a house of solid gold (and gold can only go up)and I think you well could become the richest person in the world within no time at all, way more richer that that kid that bought the chicken that shits golden eggs.

Share this post


Link to post
Share on other sites
I am very bullish on gold and have purchased quite a large amount for someone of my income bracket, but I would never advise anybody to borrow to invest, unless you have some special inside information about a comet hitting the earth/ thermo nuclear war/ zombie invasion/ alien attack or impending currency collapse.

This is very sound advice. Borrowing to invest is a game for mugs. I've got spare cash to cover my CC borrowings for gold if credit tightens, and it was more for fun to see how it works out over 5 years or so, and because I like the idea of borrowing off the barstewards at 3% to use their money against them.

It's very possible that a liquidity contraction will drop POG substantially, which I'm hoping for in the next year or so.

Share this post


Link to post
Share on other sites

I'm well aware that taking out a huge loan to buy gold is a potentially risky venture,

but is it really any different than taking out a huge loan to buy a house?

Both could go down in price and put me in negative equity.

But the flipside is, any rise in price is multiplied for me.

I wonder what the bank would say, probably something along

the lines of only terrorists and drug-dealers use gold.

Decent upstanding people use paper money.

Share this post


Link to post
Share on other sites
Okay, so why will the banks lend me the money to buy a house,

but not secured gold?

If you buy a house with a mortgage you don't own the house until you have paid off the mortgage, they own it and they can take it back when you fail to keep up payments. They will lend to anyone with a pulse when house prices are going up as if you fail to keep up the payment they make cash of the interest and from selling the house back into a bull market.

A house is in a fixed location it tangible like gold but not liquid whereas gold is both tangible and liqiud. You cannot do a runner with the house as it has a fixed location, with gold you could skip the country, that's why they would need the loan secured against an asset as was pointed out earlier in the thread.

liquid tangible

http://en.wikipedia.org/wiki/Gold_as_an_investment

Gold and other precious metals are assets that are both tangible and liquid (i.e. easily traded), unlike real estate which is tangible but not liquid, or company shares and bonds which are liquid but not tangible.

Share this post


Link to post
Share on other sites
what % of your savings have you put in gold?

5-10 percent and no-more the experts recomend, I personaly have a higher percentage and that's risky, anything over 5-10 percent is a gamble. Read this thread and all the links,

http://en.wikipedia.org/wiki/Gold_as_an_investment

there are for and against arguments, this thread just won't die, when HPC actually happens and this forum is no more, then we should rename this forum GPC as all the bulls that are buying houses at this moment will then be buying gold at way over the value, and that will be the time to sell gold and maybe invest in oooh houses?

Edited by enrieb

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 355 The Prime Minister stated that there were three Brexit options available to the UK:

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.