Margin Loans - Effective Investment Strategies from Biltmore Capital Advisors

http://biltmorecap.com/margin-loans/ - Biltmore Capital Advisor's President, Tyler Vernon discusses how an effective margin loan strategy from Biltmore Capital can help put your investment assets to work with more borrowing flexibility. Some of the benefits include no closing costs, and the ability to borrow at rates as low as .77 percent. Tyler also discusses margin loan risks and investments strategies used by clients. Transcript available below. My name is Tyler Vernon, President of Biltmore Capital Advisors. What I wanted to do in this short video today was talk a little bit about margin loans, what they are and some interesting uses and how you might want to think about them. Margin loans are loans instead of against a house or other collateral you're using your investable assets, so things like stock, bonds, mutual funds or cash. Margin loans are typically tied to a variable loan structure. We're fairly confident the rates are going to stay low for quite some time, but if you wanted to lock-in any type of long-term rate, margin loans certainly wouldn't be the way to go. Biltmore Capital as an independent firm has been able to negotiate some the lowest rates in the country. Clients have come to us from all over the world to take advantage of some of these rates and what we found is that they've really thought out in the box with taking advantage of these record low interest rates. Obviously some are just refinancing current margin loans or refinancing other debt, but others are going out they're buying stock market investments if they do think that the market will continue to move up. Some of our clients have borrowed at rates .77 percent and they lend it out on the back end at 7, 8, 9 percent. Other people have used this margin loan to flip homes. One of the real benefits of the margin loan is there's no closing costs. They can immediately pull money and pay it back, so some people that are bullish on the real estate market have gone out and bought rental properties and they're using that income to aggressively pay down the loan. Others might be retiring over the next couple years and they know that they're going to be moving to another area of the country. Why continue to pay a mortgage rate that's up at 4.5, 5, 6 percent if they can refinance that to a much lower rate of 1 percent and save tens of thousands of dollars a year. There certainly are risks to think about when you're contemplating using a margin loan. Obviously if the value of the collateral goes down or you stop making some payments, the banks has the ability to sell your underlying stock or other collateral, so you really want to make sure you sit down with your financial advisor and understand the risks that are associated with it and have risk mitigation strategies in place that if that event does come you have a plan sought out. I'm not here to encourage you today to take on more debt or use a margin loan. It's not really until you sit down with your financial advisor and you understand everything that's going on your financial life can you really start figuring out - hey we do this, we can do that, we can save a lot of money here by restructuring some the debt. I hope you found this video useful at any time feel free to call any of us here at Biltmore Capital Advisors we'll be happy to discuss if a margin program might be right for you.

Comments

1. Still cldnt undestand wht margin loan is