I read this post in January of 2021, https://www.mrmoneymustache.com/2021/01/29/margin-loan-ibkr-review/ and the Pete I refer to is MrMoney Mustache. It involves a margin loan from IBKR at low interest rates.
I took advantage of Pete's "How to make an impulse purchase" although I used it as a way to help my daughter and son-in-law buy a HUD Repo house. They made a bid on the home in January 2021. They weren't the high bidder, but the high bidder thought he was going to renegotiate the bid price ( don't no why) so, he fell through as a buyer. Then it was my daughters turn. They qualified, but the house required some things to be done to the house for it to qualify for the loan. Things were kinda falling into place when the company handling the loan merged with another and stopped all closings until the merge was settled. Then they could not get a manager for the new office. Now it had become May of 2021 (5 months) and the kids were starting to wonder if it was going to happen. So I moved my taxable assets from Vanguard to IBKR thinking I might need a margin loan to buy the house. Then in July, I decided not to hold out any longer for the HUD loan, So I wrote a check and borrowed $239,000 on margin and closed on the house July 30, 2021. I also held a mortgage for my kids for $239k at 4% the first year and 6% for the second year. My plan-- this was great incentive to get the house fixed up and remortgaged. I think my rate at that time with IBKR was 1.52%. I commented on Pete's blog that I had about a 39% margin rate, Pete suggested I get a Heloc, to pay that down just in case the market tanked. In Sept 2021 we completed the HELOC and transfered $100,000 over to IBKR to lower the margin well below the 50% requirement. The Heloc had a teaser rate of 0.99% for 6 months. The kids, got a new roof, removed all the plaster from the kitchen, dining room and living room and got new drywall installed, new kitchen cabinets, new window, new doors, new appliances, floor, sink, etc, they did a lot. Today, just short of 10 months after the Loan, the have signed the new mortgage and I deposited the check this afternoon. They got their mortgage rate locked in just a little late but still got a 3.25% 15 year mortgage. My daughter has 5 more days of dental school and she will soon start practicing as a dentist. Dad's happiest claim-- they are in debt for a $239k mortgage not a $550k mortgage, that they could easily be, if they hadn't seen this house when they did. The house is a bit of a dream house for them, on the water in South Florida on the gulf side.
I took advantage of Pete's "How to make an impulse purchase" although I used it as a way to help my daughter and son-in-law buy a HUD Repo house. They made a bid on the home in January 2021. They weren't the high bidder, but the high bidder thought he was going to renegotiate the bid price ( don't no why) so, he fell through as a buyer. Then it was my daughters turn. They qualified, but the house required some things to be done to the house for it to qualify for the loan. Things were kinda falling into place when the company handling the loan merged with another and stopped all closings until the merge was settled. Then they could not get a manager for the new office. Now it had become May of 2021 (5 months) and the kids were starting to wonder if it was going to happen. So I moved my taxable assets from Vanguard to IBKR thinking I might need a margin loan to buy the house. Then in July, I decided not to hold out any longer for the HUD loan, So I wrote a check and borrowed $239,000 on margin and closed on the house July 30, 2021. I also held a mortgage for my kids for $239k at 4% the first year and 6% for the second year. My plan-- this was great incentive to get the house fixed up and remortgaged. I think my rate at that time with IBKR was 1.52%. I commented on Pete's blog that I had about a 39% margin rate, Pete suggested I get a Heloc, to pay that down just in case the market tanked. In Sept 2021 we completed the HELOC and transfered $100,000 over to IBKR to lower the margin well below the 50% requirement. The Heloc had a teaser rate of 0.99% for 6 months. The kids, got a new roof, removed all the plaster from the kitchen, dining room and living room and got new drywall installed, new kitchen cabinets, new window, new doors, new appliances, floor, sink, etc, they did a lot. Today, just short of 10 months after the Loan, the have signed the new mortgage and I deposited the check this afternoon. They got their mortgage rate locked in just a little late but still got a 3.25% 15 year mortgage. My daughter has 5 more days of dental school and she will soon start practicing as a dentist. Dad's happiest claim-- they are in debt for a $239k mortgage not a $550k mortgage, that they could easily be, if they hadn't seen this house when they did. The house is a bit of a dream house for them, on the water in South Florida on the gulf side.
