Advice Needed Pls

[aureus]

Banker recommended using
1. Home Equity Loans
2. Use that money for Bonds

Apparently, this will mean the property finances itself.
True?
Catch?
Wisdom?
Tks

[Arcachon]

Banker recommended using
1. Home Equity Loans
2. Use that money for Bonds

Apparently, this will mean the property finances itself.
True?
Catch?
Wisdom?
Tks

False, If interest from 1 is > than 2.

[westman]

Banker recommended using
1. Home Equity Loans
2. Use that money for Bonds

Apparently, this will mean the property finances itself.
True?
Catch?
Wisdom?
Tks


Watch out... That how Americans housing problem begin...

[howgozit]

May I know which bank and which bond did they recommend? Thanks


Banker recommended using
1. Home Equity Loans
2. Use that money for Bonds

Apparently, this will mean the property finances itself.
True?
Catch?
Wisdom?
Tks

[Laguna]

There are many considerations in this equation. I list a few.

1. There is sale charge involved if u buy bond funds. The charge can be as high as 3% upon purchase. No sale charge upon sales. The bond fund manager charges around 1.5%pa.
2. If u buy straight bond, the default risk is higher.
3. Financing cost on leverage ranging from 1.8% (S$ and US$) to as high as 5% for A$. Equity term loan on properties should be around 1.3% thereabout.
4. custodian fee is around 0.2% there about.
5. U can leverage 3-5 times.
6. some bonds are paying in ave of 5% (US$) or 8% A$
7. beware of currency risk exposure unless ur in S$ hedged.
8. There are many consideration to pick a fund, like callable, cumulative, tenure, collateral, credit grading, currency, issuers, dividend history etc etc.

There are many good corporate bonds in the market and u can leverage on.