Can Traders Get A Loan or Mortgage

Discussion in 'Professional Trading' started by Fundlord, May 6, 2015.

  1. newwurldmn

    newwurldmn

    To respond line by line:

    Fair point that I used an antedoctal example (and even cherry picked the time period). But who faired better in nyc: buyers in 2007 and held to today or those who rented throughout? One had fixed payments for 7 years and saw their asset appreciate and the other only saw their cost of living substantially appreciate.

    Houses can lose money but you don't get margin called on them when they do. Remember I am saying that you need to hold the house for the long term. If you are unable to do that (life stage or career choice) then you shouldn't own.

    Different areas have different pricing dynamics. When I lived in nyc annual rent to asset price was between 4-6percent. The annual cashflow buying on an after tax basis was a little higher than renting on day 1. Over time (and inflation), it would be more favorable to own. Unfortunately in NYC at that time, it took 10 years for the economics to work out and I didn't have that far of a horizon (both life stage and volatile career choice). In my new location, annual rents for houses run between 7-12% of the real estate value and maintenance expenses are much less. The economics are favorable on day 1 (that is my pre-tax monthly payments are less than I can rent my house for).

    Check out the ROB function. It has 4 calculations: monthly payment, total cash outlay, NAV pre-tax, NAV post-tax. The first is your cash flow today. The second represents your nominal dollars over the period you enter, the other two represent a DCF valuation. I don't understand how basic NPV math is "mere statement and opinion of" mine.

    Final point. Outside of unique shocks (911 attacks in NYC, 2009 crisis): real estate prices generally reflect a term bond based on rents today. Over time rents go up asset prices go up (inflation is generally positive), but mortgages stay the same.

    Your original point was that no one should take a mortgage and instead pay cash for a house and rent until they have the cash. I am contesting that saying that taking a mortgage (even if you have the cash to pay for a house) is not a bad idea. If you don't believe in taking debt, that's your choice. I personally believe its a suboptimal one and there's basic math to support me.
     
    #51     May 9, 2015
  2. Even better you own a put on the house and can assign the bank. With 3-5% down payments available, there's legitimate value there early on in the loan.
     
    #52     May 9, 2015
    Roy Campbell and marketsurfer like this.
  3. robot

    robot

    I got my mortgage from Alberta Mortgage last year. There has been some recent changes which allows self-employed to get mortgage with a downpayment as low as 5%. Only if you can submit tax details of last two years. If it is for less than 2 years the downpayment will be 10%. Anyway the mortgages lenders are looking for people with good credit history.
    Source : http://www.albertamortgagecentre.com/are-you-self-employed-and-looking-to-get-a-mortgage/
     
    #53     Apr 26, 2016
  4. I was asking myself the same question. As far as I see, a lot of people here don't think so.
     
    #54     Jun 26, 2020
  5. p0box4

    p0box4

    Banks and loan companies want stable income to make sure you will be able to pay off the loan, something trade can not offer.
     
    #55     Jun 26, 2020
  6. %%
    Well since banks make money off a loan being repaid- you have a clue already.
    Any self employed/business requires more proof than any job.Like WFC required a signature releasing IRS to give them a copy, of my tax returns , in addition to the 1040s I gave them.[Usually 3 years returns required]
    Actually a 20 year job is ''no prediction '' that it lasts or loan will be repaid
    On the other hand I asked a community banker once if he wanted to see a current tax form/not needed...………………………………………………………………………………………………………………...
     
    #56     Jun 26, 2020
  7. Besski

    Besski

    Being a trader, you can get a mortgage, but only under certain conditions. The lender will look at how large and consistent your income has been, in order to decide if it’s likely that you will be able to repay the loan. I was lucky to get a mortgage at ClearPath Lending (you can check the reviews of this company here https://clearpath-lending.opinion-corp.com/review.html if interested). Generally, it’s good to have at least 12 months of profitable trading history.
     
    #57     May 23, 2021
    murray t turtle likes this.
  8. %%
    Local, community banks can be much/ much more flexible than any big bank........................................................................................Most may prefer several years tax returns + remember banks make money off loans, so again its a hint on your risk.

    Paying cash for RE has its advantages/ but i like the way any good bank will look closely @ collateral, in this case =REALTY.....
     
    #58     May 24, 2021
  9. %%
    Good points;
    but he may want to invest in some good books\ even if adjusted up for inflation// appreciation most milionairs dont live in a million dollar home.SAVE 100% of income HUH??he also needs to get real/food/taxes, gasoline taxes/ insurance.....................................................
    Shoes maybe repaired also; but takes me real work to overcome negative attitude..................................................................Have a blessed week/year:caution::caution::cool::cool::cool::cool::cool:
     
    #59     May 25, 2021
  10. wrbtrader

    wrbtrader

    In contrast, a well known bank, bank down the street or applying for a business credit card will want to see much more information to determine if someone qualifies.

    The basic is that a trader will be smart enough to open a business account at their bank and their taxes has been filed in such a way that their government tax agency does not view them as someone that's unemployed.

    wrbtrader
     
    #60     May 30, 2021