Securities/Portfolio Backed LOC

[Kevin Nichols]

I met with a bank today who presented a securities-based LOC that can be used for real estate purchase.

Scenario
Currently this bank has none of my business. I gave them a financial snapshot and they came back with a deal.

The bank will provide a LOC that is prime - 0.25% (currently 3%) for as much money as I move from my current Schwab brokerage into their wealth management division and invest with them. I'm open to mutual funds I currently own, but must keep the money with them for the length of the LOC.

As soon as I move the money, they'll provide the same amount in the LOC. Move $50K, get $50K LOC. Move $200K, get $200K LOC.

The LOC has no associated extra fees, beyond the 3%. But I'm waiting for the strings to be attached...in terms of broker fees or something. I have another meeting next week to discuss details.

Has anybody else used an instrument like this?

Thanks,

Kevin