All Topics / Finance / Splitting a cross-collatoralised loan

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  • Profile photo of rachelrodriguesrachelrodrigues
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    @rachelrodrigues
    Join Date: 2012
    Post Count: 10

    I have two properties and both properties in the loan portfolio are cross-collatarilised against each other. I have spoken to the bank and they said it is possible to have them both as stand alone mortgages by completing a partial discharge application. Both properties would have to be valued and I may have to pay LMI on one the properties. I think the benefits of having them both as stand alone mortgages would far outweigh the extra 5 – 10 k in LMI that may have to get rolled into one of the loans, but I'm interested to hear people's opinions.

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
    Post Count: 16,213

    u could wait for further growth. that is a lot of money to pay out.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    Hi Rachel

    Firstly welcome to the forum and i hope you enjoy your time with us.

    Without knowing the actual numbers it is difficult to comment with some authority but i must admit i would be concerned why your existing lender is wanting to charge LMI again as had they done it correctly the first time you wouldn't be up for the additional cost.

    I spend most of my working week at the moment untangling loan structures for forum clients who have had them badly structured by their Banker / Broker. It all really boils down to either a lack of knowledge or laziness on the part of the Banker as there is no difference and in fact i cannot think of any positive reason for a borrower why you would want to cross a loan.

    Cheers

    Yours in Finance 

    Richard Taylor | Australia's leading private lender

    Profile photo of rachelrodriguesrachelrodrigues
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    @rachelrodrigues
    Join Date: 2012
    Post Count: 10

    Hi Richard,
                        The reason the bank gave for the need to charge the LMI is because the second property doesn't have enough equity.

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    tofhas it dropped in value?
    i
    if n

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    try again

    if not then you could set up a loc on the first property and use this to pay down secnd loan. this should be dine so as to maintain deductibility. richard should be able to set thi upand maybe get u a better ratewhile u are at it and to teach your bank a lesson too.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of rachelrodriguesrachelrodrigues
    Participant
    @rachelrodrigues
    Join Date: 2012
    Post Count: 10

    I had a local real estate agent value it recently and according to their valuation it is worth slightly more than what I paid for it. I may give Richard a call on Monday. Thanks :)

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    as long as both loans come in at less than 80% of the value of both properties it should be possible to restructure without lmi – subject to servicing etc

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    Hey Terry put your teeth back in that's 2 in a row very unlike you.

    Cheers

    Yours in Finance

    Richard Taylor | Australia's leading private lender

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    i am trying to reply on tablet but am having problems

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of gibbo1gibbo1
    Participant
    @gibbo1
    Join Date: 2008
    Post Count: 152

    Can normally tell which posts are on the tablet. Terry maybe time for an iPad

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    So we can see lol

    Cheers

    Yours in Finance

    Richard Taylor | Australia's leading private lender

Viewing 12 posts - 1 through 12 (of 12 total)

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