All Topics / Finance / Impact of CFD account on IP loans?

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  • Profile photo of pyjamatraderpyjamatrader
    Participant
    @pyjamatrader
    Join Date: 2003
    Post Count: 3
    August 31, 2004 - 4:53 am

    Hi Everyone,

    Great Forum! This is my first post here.

    I’m thinking of opening a CFD trading account with Man Financial, but I’m unsure of how this may impact my applications for any future IP loans. Does anyone here know how these sorts of accounts are treated by lenders/mortgage insurers?

    Thanks,
    PT

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213
    September 1, 2004 - 4:04 am

    Are these like margin loans? If so, then these will effect your borrowing capacity. Lenders will take the monthly repayment as an expense. However they generally do not like taking dividends into account as income.

    Terryw
    Discover Home Loans
    North Sydney
    [email protected]

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of jonlee1980jonlee1980
    Member
    @jonlee1980
    Join Date: 2004
    Post Count: 1
    September 1, 2004 - 11:09 am

    Hi pyjamatrader,
    CFD’s are generally packaged together with equity and hence an asset. A lender could argue that there is an unlimited exposure because of the leverage, and thus considered a potential risk, but all broking companies that i know have margin calls to prevent them losing money – and thus a zero risk to the lender.

    Thanks for the reference of man financial. i use CMC group. Will now make comparisons.

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