Join our investing community

Margin Loans Margin Loan - A little help please

Discussion in 'Finance & Banking' started by Sk3tChY, 10th Aug, 2007.

  1. Sk3tChY

    Sk3tChY Well-Known Member

    Joined:
    4th Aug, 2007
    Posts:
    358
    Location:
    Sydney, NSW
    Ok well this is my first margin loan, so im not really 100% sure on how this works.

    Basically im setting up with Commsec, but before I actually borrow anything, set out how much interest I want to pre-pay etc... I need to apply for a credit limit or something.

    Now initially I'll prob want $24,500 loaned out, because thats all I have the equity for at the moment. But in about 2 months time, i'll hope to be borrowing $49,000. I'll be selling my car, getting my tax back etc, so by this time i'll have the equity.

    What credit limit should I apply for?

    I have a full-time job etc, if that makes any sort of different in this case.
     
  2. Simon Hampel

    Simon Hampel Co-founder Staff Member

    Joined:
    9th Jun, 2005
    Posts:
    4,619
    Location:
    Sydney, Australia
    Apply for as much as you feel comfortable with for now ... the limit is arbitrary and has no impact on what you can do in the short term ... just serves as an upper limit. The margin lender may have their own internal flags for higher limit requests which might invoke a request for servicability checks, but that's probably at a pretty high limit.

    Perhaps request $500K or $1m and see what they say ? You can't actually borrow this much without providing enough security to match - so there's no risk to them or you.
     
  3. Simon

    Simon Well-Known Member

    Joined:
    17th Sep, 2005
    Posts:
    520
    Location:
    Newcastle
    Does a big limit appear on your CRA?

    Going $500K, even if undrawn, may hurt when applying for a mortgage?

    I got to admit I am not sure what info Margin Lenders put on one's CRA. Does anyone know?
     
  4. Sk3tChY

    Sk3tChY Well-Known Member

    Joined:
    4th Aug, 2007
    Posts:
    358
    Location:
    Sydney, NSW
    Hypothetically if I had $10,500 worth of CBA shares. And the max LVR was 70%

    How could I apply for more than $24,500 ...?
     
  5. Sk3tChY

    Sk3tChY Well-Known Member

    Joined:
    4th Aug, 2007
    Posts:
    358
    Location:
    Sydney, NSW

    CRA??

    Come online smack, save meeee!