How will Margin Loan impact mortgage approval/funding?

[Jack81721]

Hello,

 

If I have a margin loan balance of say 300k with my broker. How does that impact my ability to qualify for a mortgage? Are these margin loans ignored when looking to debt-to-income?
 

I’m unsure because margin loans do not require monthly payments and are backed by assets (stocks/options) that can be liquidated to maintain maintenance requirements.

 

Obviously with a 300k margin loan balance, I’d have 600k+ in stocks and other assets which would net out to positive 300k+…. So it’s kind of a loan but not really…

 

Thank you so much for the insights! Appreciate it.

[MarvBear]

Welcome to CreditBoards.

[liverichly]

Because the margin loans are secured against financial assets that can be liquidated then they wouldn't be counted against your debt-to-income ratio.  It's similar to how loans against a 401k aren't included in the DTI.  Fannie Mae's guideline on it is:

 

When loans are secured by the borrower’s financial assets, monthly payments for the loan do not have to be considered as long-term debt.

Edited December 23, 2022 by liverichly