tede02 Posted January 28 Posted January 28 Using HELOC financing to buy promotional CDs or Treasurys looks interesting. I think there is a narrow window to take advantage of this risk free (I expect the Fed to cut rates over the next year). There are some credit unions offering 6-12 months of 0% on HELOCs. Likewise, 12-14 months CDs are plentiful at 5.5%. There are some credit unions offering specials over 6% (more restrictions generally). You do need to look carefully at the fine print on the promotional HELOCs because there can be significant fees. But, if a guy could get $200k at 0% and reinvest at 5.50%, that is interesting, even if you have $2k of closing costs. Curious if anyone has done this.
fareastwarriors Posted January 28 Posted January 28 22 minutes ago, tede02 said: Using HELOC financing to buy promotional CDs or Treasurys looks interesting. I think there is a narrow window to take advantage of this risk free (I expect the Fed to cut rates over the next year). There are some credit unions offering 6-12 months of 0% on HELOCs. Likewise, 12-14 months CDs are plentiful at 5.5%. There are some credit unions offering specials over 6% (more restrictions generally). You do need to look carefully at the fine print on the promotional HELOCs because there can be significant fees. But, if a guy could get $200k at 0% and reinvest at 5.50%, that is interesting, even if you have $2k of closing costs. Curious if anyone has done this. If you're on top of things and don't need to borrow money in the near term, it's not a bad way to make some interest arbitrage money. I did it with HELOC and PLOC during covid times and doing some with 0% APR credit cards.
tede02 Posted January 28 Author Posted January 28 I was excited about this but I'm having a tough time finding local credit unions with the promotional rates. For any New York state residents, there is a CU offering 12 months at 0%. Not sure what the closing fees are. Sidney Federal Credit Union.
fareastwarriors Posted January 28 Posted January 28 (edited) 2 hours ago, tede02 said: I was excited about this but I'm having a tough time finding local credit unions with the promotional rates. For any New York state residents, there is a CU offering 12 months at 0%. Not sure what the closing fees are. Sidney Federal Credit Union. oh lol. Thought you already had those offers available when you made this thread. I also pick up like $4k last year doing bank and brokerage bonuses using my name and the spouse. https://www.doctorofcredit.com/best-bank-account-bonuses/ (FYI, I do these even if the $300 deal won't make a difference in my life because I enjoy it. ) Edited January 28 by fareastwarriors
lnofeisone Posted January 28 Posted January 28 I do this a lot with credit cards 0% BT (there is a 3-4% fee). Mostly because I enjoy it. One suggestion I can make is buying a CD through brokerage reduces the extra paperwork you have to do. Treasuries are fine through TreasuryDirect or brokerage.
Dinar Posted January 28 Posted January 28 You guys do not take into account taxes. Paying 3-4% interest that is not deductible to receive 5-6% that is taxable depending on your tax bracket could be a negative cash flow event.
fareastwarriors Posted January 28 Posted January 28 (edited) 3 hours ago, Dinar said: You guys do not take into account taxes. Paying 3-4% interest that is not deductible to receive 5-6% that is taxable depending on your tax bracket could be a negative cash flow event. Yup, I do. I have Real Estate Professional status with plenty of "losses" so I essentially pay very little to no income tax Life's pretty ok. (But I understand not everyone is in similar boat.) Edited January 28 by fareastwarriors
Red Lion Posted January 28 Posted January 28 Just now, fareastwarriors said: Yup, I do. I have Real Estate Professional status with plenty of "losses" so I essentially pay very little to no income tax. Life's pretty ok. This is my goal. Not quite there yet.
fareastwarriors Posted January 28 Posted January 28 1 hour ago, RedLion said: This is my goal. Not quite there yet. Well I also live a simple life with no expensive hobbies so I don't need high current income to live well. With that said, my spouse is going back to work after being laid off and looking for work for past year. That will certainly help use up a bit of the losses. Sorry, not helping CA's budget deficit!
TwoCitiesCapital Posted January 30 Posted January 30 (edited) On 1/27/2024 at 6:39 PM, tede02 said: Using HELOC financing to buy promotional CDs or Treasurys looks interesting. I think there is a narrow window to take advantage of this risk free (I expect the Fed to cut rates over the next year). There are some credit unions offering 6-12 months of 0% on HELOCs. Likewise, 12-14 months CDs are plentiful at 5.5%. There are some credit unions offering specials over 6% (more restrictions generally). You do need to look carefully at the fine print on the promotional HELOCs because there can be significant fees. But, if a guy could get $200k at 0% and reinvest at 5.50%, that is interesting, even if you have $2k of closing costs. Curious if anyone has done this. Never tried with a HELOC, be t as others have mentioned, I do this with balance transfer offers on credit cards. 0% interest with fees ranging from 3-5% of transfer amount for 12-18 months. Regularly am floating 50-70k this way. Getting hard to find competitive offers to roll the debt though, but still occasionally receiving worthwhile offers to extend the portions nearest to charging interest. I've never seen promotional HELOC or LoC offers, but I'd be much more open to using my those than balance transfer offers if someone has suggestions on where to look for those. Edited January 30 by TwoCitiesCapital
fareastwarriors Posted January 30 Posted January 30 5 hours ago, TwoCitiesCapital said: I've never seen promotional HELOC or LoC offers, I want to say I seen some in the mail before for like 6-12 months but I can't think which lender right now. Only this one offering 3-months at 0% with some quick googling. https://www.uwcu.org/home-equity/promo/zero-new/
Gregmal Posted January 30 Posted January 30 Yea this idea seems conceptual to me. I haven’t seen any products or offers that really make this worthwhile or even possible. For the end dollar amount benefit it would probably be easier to just open one of those Citi diamond or Chase private client accounts and get $3000 offers. The process for a HELOC is also akin to applying for a mortgage in terms of paperwork which in itself would be a huge negative to me.
Intelligent_Investor Posted January 30 Posted January 30 Tbh churning CC rewards is probably higher ROI given there are methods you can float the spend
brobro777 Posted January 31 Posted January 31 10 hours ago, Intelligent_Investor said: Tbh churning CC rewards is probably higher ROI given there are methods you can float the spend Yea bank bonuses are good but real deal are the credit card bonuses. I remember years ago cashing out a ton of Amex MR points via Charles Schwab at 1.25 cents per point. And no taxes to pay unlike bank bonuses! That was pretty good haha
Gmthebeau Posted January 31 Posted January 31 5 minutes ago, brobro777 said: Yea bank bonuses are good but real deal are the credit card bonuses. I remember years ago cashing out a ton of Amex MR points via Charles Schwab at 1.25 cents per point. And no taxes to pay unlike bank bonuses! That was pretty good haha im way to lazy to mess with shifting zero balance offers etc. way to much work for me. I use to do the credit card bonus game a lot and agree that’s probably more lucrative and way easier. I have not even done that for a few years even though my mailbox is stuffed with offers every single day
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