Currentll have PPOR under construction and 2 INV looking to tap into equity to reinvest and tap into larger amount of equity in PPOR when home finished. Mortgage brokers giving conflicting advice 1 saying to create stand alone loands the other not such a big deal in his eyes as all connected to some degree…..please advise if really that big a deal if cross collaterize during 'building portfolio stage'?
If they don’t need to be crossed than don’t cross them. It can be a real nightmare later on – especially if you’ve got a few properties all crossed up together.
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]
Using a property as security means you are giving the lender extra rights to take that property should default happen – surely you would want to minimise and/or delay this as much as possible.
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
I feel I seem to have one broker on more of a property investment wave length and the other a little more conservative, so if needing mortgage lenders insurance worth paying to create stand alone? Lastly it has been explained to me that eventually once construction complete I can tap into larger amount of equity from PPOR rather than cross collaterize by withdrawing say ie $100K of equity in deductible debt loan (once used) to put towards other investments as deposit and borrow from other lenders is that normal practice of progression for serious property investors?
Thank you in advance
Please explain with numbers.
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
Ok Terry,
Inv 1 loan 165 valuation 240k
Inv 2 loan 161 valuation 210k
PPOR under construct land paid in full at $220k recent solids at 270k, house build 400k likely end loan $350kHope this helps
Lesley Yes no issues subject to serviceability in taking out a sub loan as a percentage of the end loan.
I cannot see why any Broker would suggest you cross collateralise in this situation other than to conserve his / her commission.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Inv 1 loan 165 valuation 240k = 69% LVR
Inv 2 loan 161 valuation 210k = 77% LVR
PPOR under construct land paid in full at $220k recent solids at 270k, house build 400k likely end loan $350k
not sure what this sentence means, but if it is valued at 270 for land and 400 for build then =670k and if your loan is only $350k then LVR =52%So each loan will have an LVR less than 80%. Why would anyone even contemplate crossing? Even if one or two were over 80% you should still be able to do it without crossing.
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
I know which broker I'd be going with.
I assume the broker that knew a thing or two about investment properties was the one that suggested they be set-up as stand alone?
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]
Sorry estimated value of PPOR at $800-$850K construction complete based on recent comparative sales…thanks for the feedback to date much appreciated
Thanks guys for the clarity…clearly a laid back agenda for one party
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