An earlier version of this story erroneously described the cost of trading at TD Ameritrade.

An increasing number of potential home buyers who need fast cash to close a deal or end a bidding war are turning to margin loans for short-term financing. Such clients typically will use the margin loan as a short-term strategy and then apply for a jumbo mortgage or other financing after the home purchase closes, Watkins said.

Margin loans can have some pricing advantages over mortgages and other more traditional loans. Borrowers pay no closing costs, no property appraisal is required and there are no prepayment penalties. Interest rates for margin loans can vary widely.

Trading Direct - Stock Trading with the Lowest Margin Rates

For example, Interactive Brokers Group IBKR, As at many brokerages, rates decrease as the borrowed amount increases. Charles Schwab SCHW, By comparison, the average interest rate for a year, fixed-rate jumbo was 4. Margin loans also may have tax benefits. If a home buyer cashes out stocks for a cash down payment on a house, he may have to pay capital-gains taxes. Interest on a margin loan generally is tax deductible. There is a downside. Brokers have what is called a maintenance margin.

In that case, a borrower must immediately deposit cash to bring their securities back to the maintenance margin percentage.

Otherwise the brokerage firm will sell assets to bring the portfolio back in line. Borrowers still have to qualify. Brokerages typically run a credit check and ask borrowers to fill out a questionnaire that includes their income, net worth and other monthly debt payments.

This advertisement is provided by Bankrate, which forexoma chart analyzer robot rate data from more than 4, financial institutions.

Bankrate is paid by financial institutions whenever users click on display advertisements or on rate table listings enhanced with features like logos, navigation links, and toll free numbers. Dow Jones receives a share of these revenues when users click on a paid placement. By using this site you agree to the Terms of ServicePrivacy Policyand Cookie Policy.

Intraday Data provided by SIX Financial Information and subject to terms of use. Historical and current end-of-day data provided by SIX Financial Information. All quotes are in local exchange time. Real-time last sale data for U. Intraday data delayed at least 15 minutes or per exchange requirements.

ET Breaking Stock market opens slightly higher as Wall Street tries to avoid 2nd straight down day. Updated These stocks may be ready to buying stock margin loans brokers stock merrill lynch the bullish baton from techs. Nasdaq Willy wonka stock market up 0.

Dow industrials rise 13 points to 21, Breaking Stocks open slightly higher as oil steadies. Ebay launches price matching program.

Etsy's stock rallies 0. Etsy job cuts are in addition to layoffs announced in May. Nationstar to move call center operations back to U. Updated Gold prices rise from 5-week lows as dollar eases.

Margin: How Does It Work?

Updated Oil turns slightly higher as traders await fresh U. Updated Forget ping pong, this is the hot new work perk. Home News Viewer Video SectorWatch Podcasts First Take Games Portfolio My MarketWatch. Retirement Retire Here, Not There Encore Taxes How-to Guides Social Security Estate Planning Events Columns Robert Powell's Retirement Portfolio Andrea Coombes's Working Retirement Tools Retirement Planner How long will my money last?

Economy Federal Reserve Capitol Report Economic Report Columns Darrell Delamaide Rex Nutting Tools Economic Calendar.

My MarketWatch Watchlist Alerts Games Log In. Home Personal Finance Real Estate. Using a margin loan to buy a house.

Sometimes in real estate, speed wins. Powered by This advertisement is provided by Bankrate, which compiles rate data from more than 4, financial institutions. Other News From Our Partners. APR Last Week 6 Months Low Interest We Want to Hear from You Join the conversation Comment.

MarketWatch Site Index Topics Help Feedback Newsroom Roster Media Archive Premium Products Mobile. Dow Jones Network WSJ.

Interactive Brokers Group Inc. TD Ameritrade Holding Corp.