Hello,
Two points:(i) Finacial Strategists
I am in the procees of reviewing my existing loan structure and am contemplating using “Investors Financial Group” (based in Armadale Victoria). Has anyone ever heard of them ? or has any one any positive or negative feed back in relation to this group?
(ii) Cross Collaterisation
Cross collaterisation is being cleverly employed by a number of Investors based on the theory that greater leverage is experienced as opposed to having isolated loans. What is so terrible about this strategy ?
Thanks
tbsuper2
(ii) CC is not so terrible, but it can be a pain in the butt if your currently lender stops lending to you. If you have equity but they won’t lend, what would you do? Most would want to go elsewhere, but if everything is cross up, you can only go elsewhere after painful unravelling.
You can still borrow the same amount without cross collateralising.
Terryw
Discover Home Loans
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I just came across another post related:
https://www.propertyinvesting.com/forum/topic/22939/2.html?sortfield=&sortorder=
See the one by purple kissTerryw
Discover Home Loans
Parramatta
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Just send me a blank email, with “subscribe†in subject line.Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Thanks Terry.
What if I have two properties that are cross collaterised and each has a market value of $100,000 and each experiences an increase in equity of $10,000, Under cross collaterisation, I now have total equity of $20,000 to leverage against as opposed to seperate equity of $10,000 under seperate loans with differnt banks.
.Originally posted by tbsuper2:Thanks Terry.
What if I have two properties that are cross collaterised and each has a market value of $100,000 and each experiences an increase in equity of $10,000, Under cross collaterisation, I now have total equity of $20,000 to leverage against as opposed to seperate equity of $10,000 under seperate loans with differnt banks.
.This is true.
I don’t have a big drama with xcoll if it acheieves the aim.
The point made earlier is that if that lender reckons you are at your limit you cannot easliy take one of those properties to another lender without spending time sorting out the xcoll.
At this point it can be a pita but not the end of the world.
Cheers,
Simon Macks
Residential and Commercial Finance Broker
***NODOC @ 7.15% to 70% LVR***
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0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Originally posted by tbsuper2:Thanks Terry.
What if I have two properties that are cross collaterised and each has a market value of $100,000 and each experiences an increase in equity of $10,000, Under cross collaterisation, I now have total equity of $20,000 to leverage against as opposed to seperate equity of $10,000 under seperate loans with differnt banks.
.True, but you still have the ability to increase both loans. I guess for smaller amounts it would be a bit of a hassle increasing two loans. But when you get bigger it may be worth the hassle.
Terryw
Discover Home Loans
Parramatta
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Multiple loan fees & set up costs etc on separate loans doesn’t carry much weight in support of X-Coll.
In today’s current climate with so many lending institutions offering nil application fees and in a lot of cases no ongoing fees there is (usually) absolutely no need for X-Coll.
And for those who have expensive pro packages the above should be food for thought.
Regards
Steven
Mortgage BrokerMobile Mortgage Market
Ph: 0402 483 216
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http://www.mobilemortgagemarket.com.auPLEASE note comments made should not be taken as specific taxation, financial, legal or investment advice.
Another thought on CC, if you have one property goes up and other stays same, by having them seperate you do not have to pay for both to be revalued, 2 x stamp duties etc.
Also if one property has increased a lot but the other may have actually gone down you can just revalue the UP one and leave other as is, whereas if you had to revalue they would take away some equity.
Hope this makes sense, we have just gone through this exercise, 2 properties crossed with one bank, one is in country area and has most probably not gone up, but so few sales they could value down. Other has gone up. On trying to revalue the UP one, they insist on doing both (one could cancel out the other), plus about 4K in extra stamp duty for doing both plus extra valuation costs.
If we split them (which we are doing), they will leave country at old value, then just charge to revalue other one. Later we then also have the option of moving one to another bank if necessary.
Good point Misty.
I never thought about properties going down in value, but it is certainly happening in this market.
Terryw
Discover Home Loans
Parramatta
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Sign up to my mailing list.
Just send me a blank email, with “subscribe†in subject line.Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
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