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youngf
10-05-2008, 12:46 PM
I admit that this is a rather vague question and the answer will be dependent on what stage we are at in the economic cycle, among other factors, but I'm just trying to gain a very general idea for personal edification. Is anyone here a fulltime securities trader (whether it be CFD's futures, stocks, etc)? If so, with regards to qualifying for a home loan, I understand there is some different issues to content with, when applying for a home loan. In general if you are a full time securities trader, what challenges did you face when trying to arrange a home loan either for your own property or for an investment property?

Thanks.

Steve
10-05-2008, 02:03 PM
Use a broker - they should be able deal with all personal situations...

Disc: I use MortgageLink. :)

Dr_Who
10-05-2008, 04:15 PM
I am abit confused. Why do you need a home loan when you have enough funds to trade full time? If you need a mortgage to become a full time trader, then you shouldnt be one. Only use the cash you can afford to trade stocks. Dont mortgage your property to trade!

Halebop
10-05-2008, 04:55 PM
I am abit confused. Why do you need a home loan when you have enough funds to trade full time? If you need a mortgage to become a full time trader, then you shouldnt be one. Only use the cash you can afford to trade stocks. Dont mortgage your property to trade!

I'm don't believe it's confusing to choose money making avenues over cash flow sapping ones. Trading is just a business. It's no more or less "strange" than a retail store owner getting their balance sheet and operational pedigree into shape before mortgaging up for a home.

I personally would only buy a home with cash (and certainly not for investment purposes), given how f#%^#@ up the home ownership math is. ...And personally I certainly focussed on the money making before the house buying.

Mick100
10-05-2008, 08:32 PM
Your better off just to save at the moment - cash is king
Increase your savings while house prices are falling - that's a winning combination:)

ratkin
10-05-2008, 11:02 PM
I know several professional gamblers who have exactly the same problem.
Not easy to obtain a mortgage when operating slightly outside of the system.
Normally an extra large deposit will do the trick but in these cautious times
it could be difficult

Steve
11-05-2008, 11:14 AM
If you are trading thru a company (or trust) and pay yourself a regular salary with PAYE deducted, then they are unlikely to question how you are earning your money as they will consider that you are in paid employment and will simply loo at the income on your SOE or PTS from the IRD?

Ricardo
12-05-2008, 07:10 AM
I am abit confused. Why do you need a home loan when you have enough funds to trade full time? If you need a mortgage to become a full time trader, then you shouldnt be one. Only use the cash you can afford to trade stocks. Dont mortgage your property to trade!

Dr_Who. If you need a mortgage to trade, agreed, you shouldn't be. However, if you are full time you presumably are trading successfully. To then not have a mortgage is not tax effective.
When comparing property investment versus the sharemarket the reasons property generally comes out ahead (current downturn perhaps excluded) are tax benefits and leverage.
Raising cash with your home as security is the simplest way to do get the leverage and similar tax benefits. I have used shares as a security for a bank loan many years ago, but as you are signing them over to the bank short to medium trading is then no longer an option. If your mortgage is for the purpose of buying shares, but your home is security, no problem.

Apologies to yougf as this does not address the original question at all - don't know the answer but do recall a post some time ago saying banks won't accept trading as a reliable income source. The salary via a trust would get around this.