It would be interesting to know if financing a moon real estate purchase would fill another gap in the credit mix formula that could offer a meaningful score boost.
The idea fails on a cash cost basis.
The secured loan concept works because one is cycling a $100 bill through a chain of steps that leave the appearance of a debt. One does not actually give up the $100. The payments toward the loan principal are also cycled back to the individual, essentially doubling a small sum over 5 years through an odd savings sequence.
If land is involved, one must pay a large portion of that $100 to someone else, offset by a mortgage to total $100, and eventually paying the real estate person more than $100.
@NRB525 wrote:The idea fails on a cash cost basis.
The secured loan concept works because one is cycling a $100 bill through a chain of steps that leave the appearance of a debt. One does not actually give up the $100. The payments toward the loan principal are also cycled back to the individual, essentially doubling a small sum over 5 years through an odd savings sequence.
If land is involved, one must pay a large portion of that $100 to someone else, offset by a mortgage to total $100, and eventually paying the real estate person more than $100.
Real estate agents and lawyers are not a necessary part of the process. You can just file a deed yourself at the county clerks office or whatever. Just like taking out a SS loan does not require you to talk to a banker or financial adviser and pay them fees.
You can buy property from "yourself", you don't have to give the money to anyone else (either your legal person or an entity you wholly own can buy property from some other legal entity you wholly own -- there are plenty of stupid legal terms to cover infinite possibilities where you can buy something from yourself). Or you could just "have an arrangment" with someone and purchase it from them and they in return "gift" you the same amount in return.
For that matter, you could probably form a corp yourself and have it report to the CRAs. You just need a paperwork trail to say some stuff happened, and one version of you gave some other version of you some money. People do it all the time when one of their companies buys/sells/splits with one of their other companies -- the main hurdle is registering the corps and stacks of paperwork.
@Glen_M wrote:
@NRB525 wrote:The idea fails on a cash cost basis.
The secured loan concept works because one is cycling a $100 bill through a chain of steps that leave the appearance of a debt. One does not actually give up the $100. The payments toward the loan principal are also cycled back to the individual, essentially doubling a small sum over 5 years through an odd savings sequence.
If land is involved, one must pay a large portion of that $100 to someone else, offset by a mortgage to total $100, and eventually paying the real estate person more than $100.
Real estate agents and lawyers are not a necessary part of the process. You can just file a deed yourself at the county clerks office or whatever. Just like taking out a SS loan does not require you to talk to a banker or financial adviser and pay them fees.
You can buy property from "yourself", you don't have to give the money to anyone else (either your legal person or an entity you wholly own can buy property from some other legal entity you wholly own -- there are plenty of stupid legal terms to cover infinite possibilities where you can buy something from yourself). Or you could just "have an arrangment" with someone and purchase it from them and they in return "gift" you the same amount in return.
For that matter, you could probably form a corp yourself and have it report to the CRAs. You just need a paperwork trail to say some stuff happened, and one version of you gave some other version of you some money. People do it all the time when one of their companies buys/sells/splits with one of their other companies -- the main hurdle is registering the corps and stacks of paperwork.
um, no. Just no.
Nobody in that circle (yourself being the only part of the circle) would report anything to the CRA.
The SSL does indeed require you to communicate with a bank. The bank creates the loan and then sends the information about the debt to the CRA.
Corporate reporting, if this shell did report, would not align with your personal credit report. Again, some entity would need to send the information to a CRA.
Not to mention the fees involved in setting up and maintaining the corporation.
simply a non-starter.
@NRB525 wrote:
@Glen_M wrote:
@NRB525 wrote:...
If land is involved, one must pay a large portion of that $100 to someone else, offset by a mortgage to total $100, and eventually paying the real estate person more than $100.
Real estate agents and lawyers are not a necessary part of the process. You can just file a deed yourself at the county clerks office or whatever. Just like taking out a SS loan does not require you to talk to a banker or financial adviser and pay them fees.
You can buy property from "yourself", you don't have to give the money to anyone else (either your legal person or an entity you wholly own can buy property from some other legal entity you wholly own -- there are plenty of stupid legal terms to cover infinite possibilities where you can buy something from yourself). ...
um, no. Just no.
Nobody in that circle (yourself being the only part of the circle) would report anything to the CRA.
...
You, the person, gets a loan from a bank or whatever, to buy property from the metaphorical you, a corp. You pay You Corp. with the banks money, and you pay the bank with your proceeds because you are the president of You Corp. The 'bank' reports a loan payment, just like the SSL. I'm sure someone can come up with multitudes of others ways to do it using more technical terms.
Now whether or not you consider it "worthwhile" is an entirely different question. There are no doubt some people who don't think it's worth the $10 or whatever in interest that is paid for a $500 SSL, while someone else would think it was a bargain to set up some corps and pay an originaiton fee for a mortgage etc etc and pay $1k to get 10-20 points in theri FICO score they can't easily get any other way.
@Glen_M wrote:
@NRB525 wrote:
@Glen_M wrote:
@NRB525 wrote:...
If land is involved, one must pay a large portion of that $100 to someone else, offset by a mortgage to total $100, and eventually paying the real estate person more than $100.
Real estate agents and lawyers are not a necessary part of the process. You can just file a deed yourself at the county clerks office or whatever. Just like taking out a SS loan does not require you to talk to a banker or financial adviser and pay them fees.
You can buy property from "yourself", you don't have to give the money to anyone else (either your legal person or an entity you wholly own can buy property from some other legal entity you wholly own -- there are plenty of stupid legal terms to cover infinite possibilities where you can buy something from yourself). ...
um, no. Just no.
Nobody in that circle (yourself being the only part of the circle) would report anything to the CRA.
...
You, the person, gets a loan from a bank or whatever, to buy property from the metaphorical you, a corp. You pay You Corp. with the banks money, and you pay the bank with your proceeds because you are the president of You Corp. The 'bank' reports a loan payment, just like the SSL. I'm sure someone can come up with multitudes of others ways to do it using more technical terms.
Now whether or not you consider it "worthwhile" is an entirely different question. There are no doubt some people who don't think it's worth the $10 or whatever in interest that is paid for a $500 SSL, while someone else would think it was a bargain to set up some corps and pay an originaiton fee for a mortgage etc etc and pay $1k to get 10-20 points in theri FICO score they can't easily get any other way.
So you propose to organize your own "bank" as one of the corporations? And then you will report your own credit information to the CRA?
Have at it.
The folks here looking for ideas to rebuild their score aren't in your class of money.