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  • Profile photo of 1080linda1080linda
    Participant
    @1080linda
    Join Date: 2013
    Post Count: 1
    August 17, 2013 - 8:02 am

    Hi,

    Am new to property investment and would like some advice.  I am aware of  the implications of cross-securitisation clauses within finance contracts, and am trying to avoid it.

    Lets assume that I currently have no properties, have more than sufficient cash, great credit history, very good income, no debit, and the proposed purchases are within my pre-determined loan serviceability.  If I happened to be pursuing two investment properties simultaneously  using cash inherited recently from my fathers estate,  is it practical / possible to simultaneously pursue finance for each property through separate financiers thereby enabling me to ensure that the properties aren't used as security against each other.  Or, would this result in significant delays due to the additional "due diligence" that the financier would need to undertake, to ensure that I was able to service each separate property transaction.   One is a house and land (construction loan); the other an Off The Plan (OTP). 

    The OTP has a very tight timeframe for finance/cooling off;   Exchange + 5 Working Days.  H&L is Exchange + 21 days.

    Would really appreciate advice, as I was expecting a gap between each acquisition, however by luck (or not), they are now occurring concurrently).

    Cheers

    Linda

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024
    August 17, 2013 - 12:18 pm

    Yes Linda 

    Totally doable and something we have done for clients on several ocassions.

    Cheers

    Yours in Finance

    Richard Taylor | Australia's leading private lender

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069
    August 18, 2013 - 11:49 pm

    Hi Linda

    It's possible – and like Richard, something I've done for plenty of clients.

    With this situation though, it's unlikely that you'll need to apply for finance for both properties straight away as the OTP property probably isn't due for completion for a while – is this correct?

    If so, with OTP – you need to wait until about 3 months out from completion to get your application in. Which is part of the risk of purchasing OTP – you exchange contracts without having formal finance approval in place.

    You can also have both properties financed by the one bank and avoid cross collaterising. Just make sure that you're banker/broker is fully aware of this.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

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