Borrowing against E-trade Brokerage acct. and buying cash

[Chris Masons]

[HI guys,

I have found another great 2 family that is an estate sale. I have a chance to pick up the property at a great price. This is an all brick 2 fam. in the heart of where all my others reside. It's really picture perfect for what I am looking for.

The mtg. process is going to be a logistical nightmare (if I can even get approved) for various reasons so I am trying to buy the house outright.

Has anyone borowed from their brokerage acct? E-trade for my example. I can borrow 100k @ 6.14% I actually do not have to make payments on it as it will just continue to accrue interest. But I do want to make payments on it and try and look at it as a conventional loan although it is not but I want to structure the payments back to it as such....

Has anyone done this before? I know there is risk involved but just want to hear others opinion on this.

thx in advance,
Chris

[Cole Jarvis]

I know this is an old thread but I was tempted by an e-Trade loan for similar reasons and am leaning against. It sounds like a sufficient decline in account value would allow them to call in the loan repayment.

In a traditional mortgage, your bank doesn't get to just foreclose whenever house drops in value, even if the mortgage is underwater.

https://www.finra.org/investors/alerts/securities-backed-lines-credit

How Do SBLOCs Work?

Many firms might offer you the opportunity to pursue an SBLOC, including your brokerage or advisory firm, a clearing firm (a firm that maintains custody of your securities and other assets, such as cash in your account), or a third-party lender like a bank. To set one up, you and the lender execute an SBLOC contract. The contract specifies the maximum amount you may borrow, and you agree to use your investment account assets as collateral. If the value of your securities declines to an amount where it is no longer sufficient to support your line of credit, you will receive a “maintenance call” notifying you that you must post additional collateral or repay the loan within a specified period (typically two or three days). If you are unable to add additional collateral to your account or repay the loan with readily available cash, the firm can liquidate your securities and keep the cash to satisfy the maintenance call.