Use a HedgeLoan to increase your downpayment or to refinance entirely! Use a HedgeLoan to catch up on back payments. Own real estate outright using limited recourse HedgeLoan financing with interest-only or interest-accrued terms up to 10 years. What is the Intelligent Alternative?
It is the opportunity to finance your real estate downpayment or entire project with interest-only repayment while still retaining participation in your stock portfolio using an Intelligent Alternative HedgeLoanŽ
John Shareholder wants to buy a new house. He needs cash for a down payment, but believes some good news is coming soon and doesn't want to liquidate his favorite stock position - now worth $150,000. The house costs $500,000 and he needs $100,000 for a down payment. Solution:
With a HedgeLoan, he receives up to 85% of the value of the stock on a limited recourse basis. If his favorite stock goes up, he can participate in the upside, and if it goes down, he can exercise his right to default on the loan (with no reporting to credit bureaus) and the collateral fully satisfies the loan obligation.
The good news? Either way, he keeps the capital he needed for financing his home purchase.Behind the Numbers:
This post has been edited by contrarian: May 27 2009, 05:03 AM
- He owns 15,000 shares of stock currently priced at $10 a share and puts them up for his HedgeLoan.
- With his portfolio worth $150,000, @ 85%, this yields $127,500 in cash to put towards his downpayment, with $27,500 left over for furniture or other expenses.
- Note that your HedgeLoan can be structured into an interest-only or interest-accrued format for client convenience.