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Strategies & Market Trends : MDA - Market Direction Analysis

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To: Benkea who wrote (29308)	10/13/1999 2:57:00 PM
From: Jacob Snyder	Read Replies (1) of 99985

re: I don't consider an 80/20 LTV "leveraging" your home: But there is no firewall between the money (and debt) in my home, and the money (and debt) in my stocks. Money and leverage can flow between those catagories. It's all really one big catagory called "my net worth". When I calculate my LTV, it's (mortgage + margin)/(house resale value + stocks). That may not be how a mortgage broker looks at it, but that's how I (the borrower) look at it. My cutoff for borrowing is that I have to borrow at less (adjusting for taxes) than the long-term return on stocks. Maybe a bit higher than 7%, but not by much. This narrows the type of debt I'm willing to hold to only two types: home mortgage, and (sometimes, not now) margin. Where I borrow the money, and what label is attached to it, is meaningless. I'm betting it's going to be a very long time before you refinance that 6 1/4% loan.

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