My husband and I own an investment property together with $170K equity (but owe under $70K). We want to buy ourselves a home for around $400K. Our bank says they’ll lend us the $ but will cross-collateralise our new home loan with our existing loan. Can you please tell me the pros and cons in having loans cross-collateralised? We hope to buy another investment property within 2 years, so we don’t want to be restricted. Can you offer some advice please? Thank you. [biggrin]
Why not give your bank another option. Ask them to increase the loan on your investment (separate account) and then use this as deposit on the new home loan – maybe even with a different bank.
That way you can keep the 2 loans separate and not cross collateralised. This will give you more flexibility in future and create less risk.
Terryw
Discover Home Loans
Parramatta
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
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