A couple who are long-time clients of Birch Hill were in the process of buying a new home, but they hadn’t sold their old one yet and didn’t have the cash available to fund the purchase. They reached out to us for advice about what financing options might be available to them.

We explained that there were three they could consider. They could get a traditional mortgage, but we told them that was complicated, required a loan application fee, and involved a lot of paperwork. We advised against it. We told them they could sell securities in their portfolio to provide enough cash to make the purchase. But we cautioned that this plan would trigger capital gains taxes, and again we recommended against the approach.

The best option, we counseled them, was to get what is known as a “margin loan” through their custodian. It would provide a short-term financial bridge between the time they bought their new house and sold their old one.

They agreed, and we facilitated everything including negotiating the rate directly with the custodian, taking care of the paperwork, and more. It was a simple conclusion to what otherwise could have been a considerably more complex and costly process.