# Diamond as collateral?



## shinkansen (Feb 27, 2010)

Someone told me today that his ex-wife used her engagement ring that he purchased for her as collateral on a home mortgage.

The diamond was appraised by the bank for 50k which she then used as the down payment to get a house.

Sounds too good to be true, anyone ever heard of this being done by a bank?


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## Sampson (Apr 3, 2009)

If you have a ring worth $50k, presumably there are other assets.

Why use the ring, just use cash as down payment.


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## shinkansen (Feb 27, 2010)

I know the diamond in question, as I sold it.

The diamond is not worth anywhere near 50k. So my idea was that if it is true that a bank would consider a diamond as collateral then I could do the same.

If anyone has input would be appreciated. I guess I could call some mortgage brokers as they would have more experience with this type of thing.


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## marina628 (Dec 14, 2010)

I have a $40,000 Diamond ring with a $10,000 wedding band ,I would never think to use them as collateral on anything as i assume the bank will have to hold them.Now if it was a uncut stone on it's own I am not sure how they would approach it.


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## andrewf (Mar 1, 2010)

^ Bonkers.


No offense.


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## OhGreatGuru (May 24, 2009)

shinkansen said:


> Someone told me today that his ex-wife used her engagement ring that he purchased for her as collateral on a home mortgage.
> 
> The diamond was appraised by the bank for 50k which she then used as the down payment to get a house.
> 
> Sounds too good to be true, anyone ever heard of this being done by a bank?


a) What is the likelihood that any strange story told about a woman by her ex will be true?
b) A pawn shop might do this, but not a bank.


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## Eder (Feb 16, 2011)

I sold my daughters wedding ring for her (don't ask lol).
Appraised at $8800, sold for $2000 privately and happy to get it. Nothing is as inflated as a retail/wholesale cut stone.

My guess a 50k appraisal would fetch 20k max, since it would be a nicer stone in less supply. 

When my daughters ring was appraised I offered to sell it to the appraiser for 1/2 price. He was polite but was laughing inside I think as he turned me down.


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## marina628 (Dec 14, 2010)

My friends dad is a diamond broker outside Canada ,the price i paid was 70% of the retail price here I picked one ring from Birks Prestige Diamonds line and other from Tiffany website. Not bonkers ,my appraisals are much higher than quoted .I would never paid retail for diamonds


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## Argonaut (Dec 7, 2010)

I don't know anything about diamonds. It was nice to see this thread and learn that they aren't worth anything near appraisal value. This reinforces my belief of gold as the premier precious holding.


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## Dmoney (Apr 28, 2011)

marina628 said:


> Not bonkers ,my appraisals are much higher than quoted .I would never paid retail for diamonds


I'd be inclined to say that having a 50K diamond is in itself bonkers. 

Especially when you could have this instead.
http://www.bmw.com/com/en/newvehicles/z4/overview.html


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## Charles Dickinson (Aug 10, 2011)

shinkansen said:


> Sounds too good to be true, anyone ever heard of this being done by a bank?


As you said, it sounds to good to be true, (never heard of it before) and if its really real, then i'll do the same. lol.


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## OhGreatGuru (May 24, 2009)

Argonaut said:


> I don't know anything about diamonds. It was nice to see this thread and learn that they aren't worth anything near appraisal value. ....


"Appraisal values" of jewelry are usually for insurance purposes - what it would cost to buy an identical new one, or have one made to order to match. They bear little relationship to the re-sale value of a used piece of jewelry. On one of the currently popular auction shows I recently heard that 20% was a good "rule of thumb" for sales value versus appraisal value.


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