Hi – can anyone add to this interesting cross-collateralisation scenario?
One existing loan is secured by an existing property.
We are now applying for an additional loan secured by a second property.The broker has suggested that we go back to the same bank, however it will be set up as two individual accounts, with separate mortgages and speparate properties, ie no CC.
Does this sound right and is it possible? Does this mean that even though technically we are not CCing, it still gives the bank the upper hand if all goes wrong? Is this an acceptable way of arranging finance (given they already know my history/have approved in the past?)
Thanks,
Tom.
Wont be CC'd but will have a potential problem under the All Monies Clause.
Depending on the overall situation I wouldnt have a problem with what he has suggested but if you want to be totally safe use a separate lender.
Richard Taylor | Australia's leading private lender
I agree, but just check the loan documents when they come to make sure the loan is only secured by 1 property – some banks try to slip in the other property as security when you are not looking.
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
Tom if in doubt as Terry mentioned look at your Letter of Offer under secutities and see what they have listed for the new loan.
If both securities are listed it is a tell tale sign of CC ing.
Richard Taylor | Australia's leading private lender
Excellent – thank you. Paperwork will be coming in next week so will make sure.
Even though this is my fourth I am still learning something new each time!!
Tom.
You must be logged in to reply to this topic. If you don't have an account, you can register here.
