Get a mortgage-backed-loan and invest it in the stock market?

Discussion in 'Economics' started by crgarcia, Oct 21, 2008.

  1. Get a mortgage on a house you own in full, and invest it in the stock market (an index ETF with 2:1 leverage)?
  2. vv111y


    rates are going up.

    Why do you ask this now?
  3. And then foreclose on the home?
  4. that's stupid. Leave as much cash as possible in the home, and borrow the $ in the stock mkt by purchasing future contracts. Currently the built in interest rate on the index futures is ~ 2.2%

    That's a much better rate than a mortage, you don't have to apply for shit and there's no damn loan origination fee :)
  5. And what if the bear market is only half way over?
  6. cszulc


    This is a great idea! Come back in 5 years and let us know how it went, along with the margin calls and Fed investigations.
  7. vv111y


    The advantage to this is you don't get a margin call.

    I was considering it, and maybe still will, esp. if the USD - which is going to the moon right now - crashes down into the sewer.

    But the rates are just getting worse, and you've got to find something to put it in to make it worth your while.

    And how will the USD play out?