Great, thanks…sorry for my delayed reply there's about a 7hr time-zone difference between us.

Hi Duckster,

Yeh, good idea I will research the nuts and bolts of construction loans on google…I haven't tried that yet…I'll let you know if I find anything interesting.

Might uses CBA for the construction loan but only after cross-collateralised security is removed.

Then I can also take IP #1 to any bank offering the current best 3yr fixed rate at the moment (I might use NBA…not sure yet???). Once IP #1 is locked in again for around 3yr, I'll let it sit to build up capital growth then raid the funds later.

Hi Terryw

That's a good one!!!…a 'Variation of Security'….I like the sound of it, first chance I get I'll be on the phone to CBA.

IP #1 – has sufficient equity to stand alone.
IP#2 – if the debt is reduced to $300K (from savings) this IP should then be able to stand alone aswell.

The next stage will be to establish if the CBA will be compliant with the 'Variation of Security' request, I'm assuming it may be as hard as 'pulling hens teeth'.

Hi Richard

Your absolutely right I feel like I'm being strangled…financially.

At the time of purchase (IP #2) I was in Australia and only had a few weeks until I had to return overseas for work. The estate agent selling me the IP suggested (due to lack of time to organise finance, contracts, etc) that I approach my bank rather than a Mortgage Broker to speed up the process.

The next morning I payed a visit to CBA, I must have told them at least 5 times "No Cross-C".

At the time I was also conducting small reno's on IP #1 to bring up to date landscaping, paving, tiles, painting,etc. Also cramming a lot of other activities into my short period of time in Oz such as meetings, visit with family and friends, etc.

Streeeetched for time…trying to achieve too much…added excessive pressure on myself, reduced my concentration and better judgment.

When the time came to signing contracts I didn't have enough coin deposit (just short) for the 80% LVR to avoid LMI….Oh no!!!

CBA solution was…Hey you have equity in IP #1 let's cross-c.

What choice did I have…time was running out and I didn't want tot miss out on the IP…I signed.

After signing the contract I walked out of the bank with a big grin on my face but at the same time scratching my head. Hey…there must have been a better option to access the IP #1 equity rather than cross-c.

Oh well…I was happy I just brought another IP…yippee

Now…I wish I didn't rush it…lesson learnt.

IP #1 was at a 3yr fixed rate – now a variable rate…sorry I didn't make myself clear there…now hunting for another 3yr fixed rate product.

The council told me it should be ok to split the allotment, I gave them the address details, just need to confirm with a land conveyor and get the ball rolling.

To all

Another question is concerning CBA security over IP #2 – Is it ok to just go ahead and split the allotment or do I need to get permission from CBA first?

– I could pay from my savings for the sub-division costs then have CBA re-value after.

Best regards ToWhomItMayInterest