Did you know you can borrow 100% of a mortgage?
Not lying. No 20% cash down conventional loan. No 5% cash down owner-occupied loan with PMI.
It works by pledging other assets as security.
You use it in conjunction with those other two loans. Theoretically, you can do a 5% owner-occupied loan, pledge stocks (or other assets) with the bank equivalent to the down payment. It doesn’t change the other normal factors, like needing PMI.
The only caveats are:
- If the stock value drops, you have to cover the difference
- The bank has to agree to do it
- You get them back only when the debt is covered, obviously
Theoretically you could pledge anything—it just has to be something the bank is willing to say yes to.
Shoutout to @NikitaBier for tweeting about this one. He deleted the tweet for some reason, or else I’d link it. Hopefully that doesn’t mean it’s illegal and he made a mistake.
Just kidding. This is a known—if underutilized—tactic.
There’s even one or two that do commercial loans with your Bitcoin as collateral.
