I've been saving up to buy a home, and I've primarily grown this money with stock investments. When I do decide to buy a home, I'm not too fond of the idea of putting all my savings into a mortgage down payment and using the rest to pay for capital gains tax. Instead I'd like to continue to grow my investments in the stock market so that I can eventually use the proceeds to pay off my mortgage over time.
As such, I'm interested in a pledged asset mortgage and want to find out how much in securities equity a lender would require me to have so that I wouldn't need to make a down payment or pay for PMI. Realistically I would put some money into a down payment, but I would like to know how much in pledged assets would equate to a 20% down payment to avoid PMI and work from there.
Research and Examples:
I did find this resource from Charles Schwab Bank which provides a form to look up the advance rate for individual market securities. For instance AAPL has a standard rate of 70% whereas currently TSLA has a special rate of 35% and NKLA is ineligible. It sounds like this means that 70% of the value invested in AAPL that is pledged as collateral would be eligible. Turning this into a formula would look like
0.2 * T = P * R (where
T is the total value of the mortgage, P is the pledged asset, and R is the advance rate of the pledged asset). For AAPL a $100k pledged investment is needed for a $350k mortgage, and for a more risky investment like TSLA a $200k of pledged assets would be needed.
Following this logic, if I have multiple pledged assets and a down payment, would that formula instead look like
0.2 * T = P1 * R1 + P2 * R2 + D (where P1 is asset 1, P2 is asset 2, and D is the down payment)? As a real world example, if I have a $350k mortgage and $50k in TSLA and $25k in AAPL that would mean instead of the original $70k down payment to avoid PMI, only a $35k down payment would be needed up front.
Is this the right logic? If not, could someone provide guidance or additional information?