Cross Collatorisation

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perthguy
Member
@perthguy
Join Date: 2003
Post Count: 12
July 29, 2003 - 2:28 pm
Just a quick intro – 30yo toying with the idea of investing in property, probably in 12 months. I am not sure if this has been discussed before so if you could indulge me.
We are from Perth, and our PPOR valued at $190k our mortgage $150k LVR 80%. The equity we have cannot be redrawn, so as far as i can see to utilise the equity we would have to cross collatorise. I am wrong in assuming this? I have a fairly limited knowledge of finance so some help would be appreciated.
quote:
If you always do what you’ve always done, you’ll always get what you’ve always gotten.
Terryw
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@terryw
Join Date: 2001
Post Count: 16,213
July 30, 2003 - 1:29 am
Perth Guy
You could actually refinance to 90% of the value to withdraw a little bit extra equity.
Terryw
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josie_2
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@josie_2
Join Date: 2002
Post Count: 15
July 30, 2003 - 1:39 am
Perthguy
Something also to consider is that if you are looking to wait 12 months, your property may probably increase in value in that time and you can have it re-valued and borrow against the new value.
Till then you should try and pay off as much off your loan as possible reduce your balance. Every extra dollar counts at the end of the day.
You should try not to cross collatorise – but worry about that in 12 mths.
Josie[]
ARW
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@arw
Join Date: 2003
Post Count: 21
July 31, 2003 - 6:51 am
You should be able to refinance up to 90% but would have to pay Lender’s Mortgage Insurance. Apparently if you repay the loan within 12 months you can get some of this LMI back – so if you’re keen as mustard and want to get in, then that might be worth looking at. Then get your property revalued in 12 months and if you’ve got enough equity you can refinance then and get a refund of some of your LMI.
I’m from Perth also and have been lucky enough to experience fantastic growth in the past 12 months so would have been worth getting in like that then…..but never know what the future holds!?!?!
In relation to cross collatorisation – what’s the downside of this??? I have seen a few people mention to try and avoid this, but never seen a reason why…anyone!?!?!?
ARW
Participant
@arw
Join Date: 2003
Post Count: 21
July 31, 2003 - 6:54 am
ooops, just re-read your message and see that you’re not looking to invest for 12 months….please disregard my “keen as mustard” ideas.
Cheers