Hi guys, to all those in the community I need your help. Currently I have 3 properties, 1 in Newcastle and 2 in Gunnedah. They are cross collateralised and I want to make them stand alone. How can I do this? Secondly, one of the properties in Gunnedah has a great yield the other is an under performer costing me about 100pw. This is making my job very difficult to get more finance to acquire other properties. Both the Gunnedah properties are on 1000sqm blocks. Should I sell the under performing asset or are there any other suggestions? I hope you can help.
Regards
MattHi Matt,
To un-entangle your finances you should speak to a broker who can manage the process for you.
In essence you'll need sufficient value in each property so that they provide enough security for each loan attached to the property.
Quick rule of thumb, and assuming 80% LVR all round, work out the values of each property and multiply this by 80%. If this number is greater than the loan then it may be possible to do security substitutions.
In some cases you may need to look at loan values above 80% and incur Lenders Mortgage Insurance.
To sell or not.
Once again check with your broker. It may be a lack of security rather than income that is holding you back. To build a portfolio you do need equity/growth and income. It isn't a case of one or the other.
Hi Matt
Welcome to the forum.
I agree with what Derek said. A good broker will assess your situation and advise on how to proceed with your next purchase. I wish I could offer more but there's not enough data to comment further.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Hi Matt
Firstly welcome to the forum and I hope you enjoy your time with us.
Yes certainly not an easy position to go forward with your lender when your loans are crossed.
Have to be honest a lot of my time at the moment is spent unravelling the mess caused to forum clients by lenders or other Brokers (Michael & Jamie are of course an exception) Financial Planners etc who have wrapped a client up in cotton wool, crossed all of their loans and they left them out to dry when they cant help them any further.
I start by working backwards and applying a couple of basic principles usually gets you there.
Course without further hard data it is difficult to comment how uncrossing your securities can will aid your position.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Cheers, Derek, Jamie and Richard your insights are highly valued. I will assess my situation, get some data together and be in correspondence in the near future.
Regards
Matt
You must be logged in to reply to this topic. If you don't have an account, you can register here.
