# home equity loan for silver



## noveske (Aug 5, 2011)

I owe 70k on my house and its worth about 150k. I'm trying to decide whether I should take out 10k and put it on silver. I’ve been stocking up on food and other preps and feel that I’m ok in that area.I was thinking that the housing market is going to crash when the dollar does and the value of silver will skyrocket in price.


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## DKRinAK (Nov 21, 2011)

Bad bet. Price of silver drops and you still owe. Now, had you asked this question 5 years ago....


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## FatTire (Mar 20, 2012)

Sounds like a big risk for me. You lose money (the interest on the new loan) if silver remains where it is, lose big if it drops, and only 'win' if silver goes up enough to offset the interest on the loan. Examining the 'win' scenario, if silver really does go up that much, theres a fair chance you will be using to pay for the note you bought it with, because the economy with drop so much losing your job is a nonzero probability beyond your control.

I think a better plan would be to buy precious metals as you can (physical silver, not notes) and pay down your remaining mortgage faster. 

thats my $1.25 worth anyway (i know, used to be two pennies, but everything goes up in price..)


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## TheLazyL (Jun 5, 2012)

You NEVER borrow money to make money!


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## Grimm (Sep 5, 2012)

Once your home is paid off free and clear then start investing in PMs.


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## Geek999 (Jul 9, 2013)

You will pay interest on the loan. Silver does not pay interest. You would need silver to go up faster than your interest rate to just break even.


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## sillymoo (Oct 30, 2011)

It depends on a lot of things. Is your house really worth $150,000 or you just think it is? Home prices have changed a lot in just the past 2 months in my area. Even Zillow isn't all that dependable so you may need to pay an appraiser. If you have at least 30% equity and good credit, you probably could get a good rate and low fees, but will the silver be worth the fees and charges? Do you have enough in savings to pay for the mortgage plus HELOC if you lost your job? How are you going to secure that much silver without drawing attention? What if someone steals it? I would consider doing something like this, but more of a long term investment and not "just in case". 

If it were me, and I decided to go ahead with the loan, I wouldn't just buy silver. I would buy a mix of gold and silver, with a mix of bars and investment grade coins. I would also keep 1/3rd in cash in mixed denominations. And then I would drive myself crazy worrying about keeping it safe. Which is why I buy a little at a time and spread it out in various places.


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## Magus (Dec 1, 2008)

I have an ammo can full of FOREIGN silver.American silver and ANYTHING pumped out by the 
Franklin mint is technically government property and subject to confiscation.

w00t Canadian Maples FTW!!!


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## hitman3872 (Oct 21, 2013)

The only upside to this idea is that you borrow the money today by 10k in silver and next week the government totally collapses and you have 10k in silver in your house. Being realistic where will you keep said silver? In a safety deposit box? No good banks close you have no access, in your home easy for intruders when your not home. Too many downsides to this idea. Do not do it.


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## Moose33 (Jan 1, 2011)

This is not something I would do. I never borrow to further my goal. I've got a pay as you go mindset. I do NOT do debt. Sure I drive a 13 year old car and don't have all the cool new toys but I am more than comfortable.

I also know that if I get sick or loose my job, while difficult, it would not be the end of the world. On the other hand having a mortgage I couldn't pay and loosing my home would be, for me at least.

Just my two cents worth,
Moose


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## FrankW (Mar 10, 2012)

FatTire said:


> Sounds like a big risk for me. You lose money (the interest on the new loan) if silver remains where it is, lose big if it drops, and only 'win' if silver goes up enough to offset the interest on the loan. Examining the 'win' scenario, if silver really does go up that much, theres a fair chance you will be using to pay for the note you bought it with, because the economy with drop so much losing your job is a nonzero probability beyond your control.


Good analysis


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## FrankW (Mar 10, 2012)

I think your basic idea is quyite sound in principle.

many a fortune was made by people borriwing money to make an investment they believed properly timed.

but also many bankruptcy was made as well and many in this thread made valid points.


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## Magus (Dec 1, 2008)

Your house over a maybe=stupid.
Just buy food.


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## jsriley5 (Sep 22, 2012)

I suggest taking the money that you would otherwise have been paying the extra equity loan off with and invest it in silver every couple months and skip the loan itself. Then the silver you are saving is free and clear and you haven't added to your debt. And if you can't buy a little silver AND keep adding to your BBB (Beans Bandaids and Bullets) Then skip the silver al together. Silver may very likely come out strong after a collapse but during the collapse I think its use will be marginal but the beans and other B's may be of paramount importance.


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## BillS (May 30, 2011)

noveske said:


> I owe 70k on my house and its worth about 150k. I'm trying to decide whether I should take out 10k and put it on silver. I've been stocking up on food and other preps and feel that I'm ok in that area.I was thinking that the housing market is going to crash when the dollar does and the value of silver will skyrocket in price.


We're getting to the end of the life of the dollar. Yes, I believe silver will skyrocket too. I think it's a good idea. I'd put at least 25% of that money into junk silver coins. The best I've found to buy them is here:

http://www.providentmetals.com/coins/us-silver-coins/coin-90-silver-us-junk.html


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## BillS (May 30, 2011)

I should clarify my position. I hold silver as a hedge against hyperinflation. It's a long term investment for me. I'm not looking to sell it anytime soon. If you want to buy silver and hold it for the long term then I'd take the loan out for it. Otherwise I'd be less likely to do it.


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## BlueShoe (Aug 7, 2010)

There's a whole market of people who borrow money to buy stocks and probably commodities too. Silver is a commodity.
Just determine how much you can stand to lose and take a shot. 

Think about this. If you went into a casino and made a bet and won and walked out, you just got free money. If you lose and then bet again the total amount to replace what you lost and won, you walked out losing nothing. If you still lost and made another bet for full replacement and won, you just lost nothing. Continuing until you win seems inevitable so long as you quit when you win or break even. It's the emotional aspect for most people that keeps them from doing this.


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## Immolatus (Feb 20, 2011)

Too many 'what ifs'. As much as we all enjoy the pm's, borrowing against your house doesnt seem like a good idea and I doubt many here would endorse this.
Just running through a few in my head, it seems like theres more scenarios where you would lose than come out ahead. Basically youre counting on silver appreciating *and* your home either flat or appreciating. If silver/gold is flat or down, you lose no matter what happens to the value of your house.
Your worst case scenario is both the house and silver drop, could you stomach that?
Bottom line, only invest what you can afford to lose, and if you have to borrow the money...you cant really afford to lose it, right?
One thing you didnt disclose is what you paid (will pay/are paying) for the house, and this might make a difference. If you only paid $80k for it, then maybe this makes sense, but given you have a mortgage and will be paying more than 3x the value of the house with interest and inflation...

Hmm. Do the math if you really want to figure it out.
How much will you actually pay for the $10k loan?
(Just throwing out random numbers)
$10/month for 20 years?
Keep in mind $10 20 years from now will be practically worthless, so you will have to factor in inflation also.
Throw out some real numbers, it should be relatively easy to figure out, but all of it would rely on ceteris paribus.
Hmm again. Even in the worst case scenario, lets say you lose your job/go broke/bankrupt and lose your house, at lest you would still have the silver...
Maybe the answer is not so easy?


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## Cotton (Oct 12, 2013)

Silver has been very good to me. I invested in 03, less than $5 an ounce. I've sold out 2 times on price spikes and reinvested 6 months or a year later. I still have the same quantity I started with. It's paid for a lot of prepping gear.

For someone who will 1) probably lose the house anyway in a collapse, and 2) have planned to relocate wshtf. I say go for it! imho


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## TheLazyL (Jun 5, 2012)

Cotton said:


> ...1) probably lose the house anyway in a collapse...


Absolutely!

*IF* a person knew without a doubt EOTWAWKI then mortgage everything to the hilt, max out every credit card you can lay your hands on and buy tangibles.

But that isn't what the OP was asking about.


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## mojo4 (Feb 19, 2012)

Well here is my point. Will the dollar drop in value? Absolutely. There is no end in sight to QE (as I have posted before) and the recent Fed announcement of continuing QE might bolster the market for a while. Eventually all of the overprinting will lead to inflation and then hyperinflation. So the price of everything will skyrocket but also ACTUAL PHYSICAL PM's since most traded PM's are paper and not actually backed by physical supplies. So IMHO I would say yes, it is a good bet and the 10 or 20K you take out will be easily repaid with inflated dollars. Its the same reason in the spring I'm buying a new vehicle. If nothing happens I still have a new vehicle. If the dollar collapses and we have hyperinflation then I'm paying off a new vehicle with inflated money and I win big. The only way you can lose is if silver drops in value. That just flat can't happen. The printing presses for money are going non-stop and no amount of market shenanigans by the big banks will cause silver to drop in value for entended amounts of time. But that's my opinion and plans but good luck no matter what you decide.


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## TheLazyL (Jun 5, 2012)

mojo4 said:


> ...So IMHO I would say yes, it is a good bet and the 10 or 20K you take out will be easily repaid with inflated dollars. ....


So if inflation is less then the interest on the second mortgage you lose money?

If inflation is the same as the interest on the second mortgage you break even?

And if inflation is the higher then the interest on the second mortgage then you're ahead?


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## Tacitus (Dec 30, 2012)

Magus said:


> I have an ammo can full of FOREIGN silver.American silver and ANYTHING pumped out by the
> Franklin mint is technically government property and subject to confiscation.


If we are talking about US confiscation, I'm not sure the denomination (foreign vs. US) would make any difference. I thought FDR took all gold held by US citizens, regardless of denomination and regardless of location...and took all gold held by foreigners who held their gold in the United States. (Of course, the government paid them for it in paper currency...so they had that going for them.) Silver (of any denomination) might fall under the radar, though.

I don't even think foreign paper currency would necessarily be safe in times of serious (hyper) inflation. It would probably be confiscated as well.

Now, I'm no expert, and there is a lot of unreliable information out there, and further, I welcome correction by anyone here. I only post this to encourage anyone who buys foreign denominations to do their research if they believe that they have an advantage as a result of the particular denomination they are using.


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