My team is seeing most of our luxury buyers coming into the Naples market as cash buyers. Many of our cash buyers are actually using securities based loans or
Naples, FL (Vocus) May 29, 2010
In April, Naples, Florida, unique luxury homes were a hot commodity because many wealthy investors consider these properties undervalued and are deciding to buy these homes as a lifestyle destination and a portfolio play. One factor applying downward pressure on luxury home prices is the limited availability and the difficulty obtaining a jumbo mortgage loan. Smart investors are now turning to non-recourse securities based loans to purchase a luxury home as a cash buyer.
Luxury Lifestyle Homes of Southwest Florida (http://www.LuxuryLifeStyleHomes.com) founder, real estate broker Robin Speronis reports “My team is seeing most of our luxury buyers coming into the Naples market as cash buyers. Many of our cash buyers are actually using securities based loans or “stock loans” as their cash. We are definitely seeing the tide turn with the wealthy coming off the luxury home market sidelines where they have been waiting and watching the last few years and entering the home market as cash buyers.”
Securities based loans is the lending of funds collateralized by shares of a publicly traded stock – domestic or foreign. It gives the borrower access to the liquidity of the assets without selling the stock and without creating a tax event. The term of this interest only loan is usually 3 to 10 years with the interest rate between 2.5% to 5%. The loans are non-recourse with no personal liability and funding can occur within days.
If the borrower defaults, the borrower keeps the loan proceeds and the lender only claims the collateral. There is no effect on the borrower’s credit record - even in default, no credit report is required and no income or employment verification. Up to 80% of the current value of the securities can be available as a loan.
For more information please visit http://www.LuxuryLifeStyleHomes.com
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