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Line of Credit Help Plz !

  1. moneyplease

    417 Posts.


    O.k, I'm reasonably new to this, so tell me if I'm on the right track.

    Here's the situation:

    Just say my property was worth $250,000.

    Loan remaining of say $50,000.

    Now, just say i could get a line of credit loan (equity loan) of say $180,000 (on top of what i already owe).

    If i went out and bought a house for $150,000, i'd have $30,000 left in the loan, right........

    Now, if i bought $20,000 worth of shares (directly) using the loan funds, and didn't pay the interest until dividends, then does the interest simply get added to the loan (eg, $170,000 + $1000 interest = $171,000), until it reaches the maximim limit (eg, $180,000)?

    Only when it reaches the maximum loan amount, does one have to start paying back the interest?

    Am i right in this assumption? I feel it's time to get into some more debt, well, good debt anyway, and are trying to get my head around diferent alternatives.

    Thanks guys!

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