Portfolio Package & Cross collateralised

Hi Justin,

It would really depend on whose “portfolio package” it is, and just what it entails.   A bunch of years back, I took a portfolio package with one of the big 4, and found out afterward (my dd was shameful !!) that it was charging me a higher rate than Standard Variable so I unwound a lot of it.  It had other benefits, but the over-high Interest Rate initially left a bad taste in my mouth for many years.

Check first before signing up !!!   Don’t be dazzled by all the “key phrases” they say that make things sound Mickey Mouse – do your DD on them.

Benny

PS  Edited later>>>>   And I recall that cross-collateralisation was also their “default” position (it is better for the bank, but not so good for you).  We had to re-affirm that we wanted NO cross-colls at all.   They listened, but if we hadn’t insisted, it might have been different, so watch out.

• This reply was modified 3 years, 9 months ago by  Benny. Reason: Additional comment re cross-coll !!

Hi J,

Here’s two QUICK videos which explain what ‘cross collateralisation’ is,’ how it works and what ‘loan types to avoid’, then the dangers of ‘cross collateralisation’ … you’ll be able to make your own mind up after this, I guarantee you.

VIDEO 1:  https://youtu.be/red4RU_B-CQ

VIDEO 2: https://youtu.be/CLslqC4khAE

Enjoy!

Hi Justin!

Good pick up, fixed and re-uploaded: https://www.youtube.com/watch?v=cj0Q471agbc

You definitely “WANT” a non-recourse loan!

Cheers!

Pretty straight forward: https://www.youtube.com/watch?v=cj0Q471agbc&t=31s

I said ‘want’… if you’ve got no choice, you’ve got no choice.

Possibly a better interest rate, possibly some tax benefits VS losing flexibility,  possible troubles with equity pull out etc etc

Again, I said ‘want’…  if you still disagree, add up the amount of ‘mortgage broker’ , ‘seasoned investors’ and ‘property gurus’ articles and videos who say don’t do it VS…. do it.

• This reply was modified 3 years, 7 months ago by  chrisdusting.

Non-recourse loan – https://drive.google.com/file/d/12pG3t2KUja7A3zQLMvLctt6YarNgfmzD/view?usp=sharing

Is a non cross collateralised loan not a non-recourse loan.If it doesn’t come under this umbrella specifically, I’ll make adjustments in the notes. I still don’t ‘want’ a loan that if I default they can go after my other assets :) All good, thanks for the feedback.

• This reply was modified 3 years, 7 months ago by  chrisdusting.
• This reply was modified 3 years, 7 months ago by  chrisdusting.

Rare but don’t exist? …. want… haha  all good I know what you’re saying, I guess that’s where buying in a trust etc will only protect you, that I know for a fact as I’ve been through it. Thanks again Terry, looks like I’m editing the video a second time today. Avoid cross collateralisation and set your property ownership up right, cheers

Terry, you were the expert until the last post :) I went bankrupt from 2011-2014, I lost the one property in my own name, the other 5 were not touched as they were bought in a trust so have to disagree there as I’ve been through it. Liquidator was worrels in Brisbane. But anyway, to make a video like that , maybe 6 hours script writing, 1-2 hours shooting and then about 7 hours editing… add another 40 minutes if I got to trim a bit for the firsT time like today :) and your still the expert I know what you mean by trust the other way round going personal.

• This reply was modified 3 years, 7 months ago by  chrisdusting.

chrisdusting wrote:

Terry, you were the expert until the last post :) I went bankrupt from 2011-2014, I lost the one property in my own name, the other 5 were not touched as they were bought in a trust so have to disagree there as I’ve been through it. Liquidator was worrels in Brisbane. But anyway, to make a video like that , maybe 6 hours script writing, 1-2 hours shooting and then about 7 hours editing… add another 40 minutes if I got to trim a bit for the firsT time like today :) and your still the expert I know what you mean by trust the other way round going personal.

Yes, I was probably not thinking about this sort of thing when I wrote the above. There are 2 aspects to trusts and asset protection

a) you personally become bankrupt

b) the trust itself is sued – the trustee actually.

If you personally become bankrupt assets you hold on trust are generally not available to creditors.

If you as trustee are sued your personal and trust assets will be available to creditors. But assets held in separate trusts would be generally ‘safe’.

So if you set up a trust, perhaps have a company as a trustee and give a personal guarantee, if the trust doesn’t pay its loan they could come after hte property used as security for the loan. If this is not enough to satisfy the debts the other assets of the trust, if this is not enough then your personal assets.

If there were separate trusts with also personal guarantees from you, the assets of these trusts would generally be safe.

if on the otherhand, you are sued for something personally, such as defamation or negligence then they generally could not get at assets held in a discretionary trust, even if you were the one that controlled it.