All Topics / General Property / Same bank not cross collateralised, is this possible?

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  • Profile photo of Griffo70Griffo70
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    @griffo70
    Join Date: 2015
    Post Count: 9

    Hi Guys,

    I have a home loan with NAB and i’m releasing some equity for a deposit on an investment loan. My question is- is it possible to use NAB again for the investment loan and not have it cross collateralised? My broker has said this was possible. The reason being is that NAB will lend 90% and the others are 80%.

    Any thoughts would be much appreciated.

    Griffo.

    Profile photo of Corey BattCorey Batt
    Participant
    @cjaysa
    Join Date: 2012
    Post Count: 1,010

    Certainly possible – it would just require two applications.

    First application releases the deposit funds for the purchase, solely secured to Property A.

    Second application is used to purchase new property, solely secured to Property B (new purchase).

    Corey Batt | Precision Funding
    http://www.precisionfunding.com.au
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    Investment Focused Finance Strategist - servicing Australia-wide

    Profile photo of Griffo70Griffo70
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    @griffo70
    Join Date: 2015
    Post Count: 9

    Ok perfect, thanks for the clarification Corey.

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
    Post Count: 16,190

    carefully read the loan agreements though. Not completely safe.

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

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of Richard TaylorRichard Taylor
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    @qlds007
    Join Date: 2003
    Post Count: 12,018

    Not completely safe ……………Especially knowing NAB

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
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    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of CatalystCatalyst
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    @catalyst
    Join Date: 2008
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    I had 4 separate IP loans with Comm. When I refinanced all the loans came back with every property listed on it. I told the broker (from the bank) that I did not want them crossed. She assured me they weren’t. HELLO!! It says so on the paperwork.
    I refused to sign them. She had to go back and change them so each loan onl had one property listed as security.

    They do try it on. Read EVERYTHING carefully.

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
    Post Count: 16,190

    I had 4 separate IP loans with Comm. When I refinanced all the loans came back with every property listed on it. I told the broker (from the bank) that I did not want them crossed. She assured me they weren’t. HELLO!! It says so on the paperwork.
    I refused to sign them. She had to go back and change them so each loan onl had one property listed as security.

    They do try it on. Read EVERYTHING carefully.

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    good thing you know what to look for. Most people have no idea and get ‘stiched up’!

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://structuring.com.au/
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    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of Jamie MooreJamie Moore
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    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    You can keep them uncrossed with the same lender.

    I’ve set up that exact structure with NAB and other banks hundreds of times.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
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    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of Griffo70Griffo70
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    @griffo70
    Join Date: 2015
    Post Count: 9

    Thanks guys, will make sure i read the contract carefully.

    Profile photo of Don NicolussiDon Nicolussi
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    @don
    Join Date: 2005
    Post Count: 1,086

    Yes Griffo you can ( and well done for knowing what to look for as Terry said). I agree with all above but want to add why would you? If you broker is an investor it is going to be gut instinct for them to avoid cross collateralization and also avoid a one bank trap.

    Don Nicolussi | Mortgage Broker - Home Loan Warehouse
    http://homeloanwarehouse.com.au
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    "I think of finance as a technology, a way of getting things done." Robert Shiller

    Profile photo of albertwtalbertwt
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    @albertwt
    Join Date: 2011
    Post Count: 2

    Is it done through equity released or just another investment loan product secured with different proeprty ?

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,018

    Many lenders and indeed Brokers elect not to keep the loans separate as it harder to move away if they are crossed.

    Whether it is right for the client i have seen many Brokers encourage it to capitalise on the commission and ongoing trail.

    Suggest you avoid it at all costs.

    Cheers

    Yours in Finance
    0-40 Properties in a decade. Email me for a copy of my API interview.

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me | Phone Me

    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

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