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It is reasonable that they do this. Say, for instance, you stopped working and could no longer demonstrate that you can service the loan. You sell one property thinking you can live on the proceeds of the sale and the remaining property loan will be covered by the rent. But your...

That doesn't sound correct to me. Even if the remaining LVR is 30% the bank could still require you to pay down the loan on the remaining property if you sell of one of the security properties And there is another option to that of paying cash and that is to borrow the deposit and use this...

Last year I had a guy from the forum approach me. He had about 5 properties cross collateralised and he had heaps of equity. His plan was to sell one and to spend a few years living off the funds released. I think the properties were cashflow neutral so not enough to live off the rents yet. But...

It would all be fully disclosed by the documents provided (or not provided but you signing that you received). I would think that approx 80 to 90% of the loans out there (ie people with 2 or more properties) would be cross collateralised. I wonder who had first thought of the strategy of...

That is from a true story too. Mr 'Bumburp' was a friend of mine. Only the names and amounts have been changed. He did sell a house only to have it fall through and he did have 2 heart attacks and his wife left him - not sure in what order. (but he still smokes!)

That is how I would suggest clients to do it - and I know more qualified than an AHL broker! What did she say was wrong with it?

One person can mortgage a property for a loan with someone else. If the joint borrowers default the lender could take the mortgaged property as per normal. It is like a trust getting a loan and using a personal property as additional security.

I don't think so. If both are on the title to the new property then any lender would take a property owned by one of them as additional security. Not sure about geting the LOC in both names if only one was on title and they were not married.

Loan 1 is $336k - 250k = 86k, but build so 243k Loan 2 = 270k Loan 3 = 305k Cash = sits in PPOR Loans 2 and 3 for the investment? Cash doesn't sit in the PPOR, but you have paid down the loan. This may not be an issue, but I would have had the PPOR loan IO with a 100% offset account...

That sounds like an inefficent set up. Before I say more could you please give the loan amounts and splits. Not sure that it maximises your tax deductions - maybe the opposite.

I've just thought of one reason why you may want to cross collateralise. say Mr B had heaps of equity, but no more serviceability. He could team up with Mr C who may have a high income but not equity. They could jointly buy a house, or be jointly involved in a trust or a company. This...

Nope. You could have borrowed, say, 60% against the small unit and 40% from a LOC on your PPOR for example.

This is only half true. At the end of the day the banks could force you to sell all assets to satisfy a judgment. But having properties stand alone along the way allows you to start selling on your own terms if and when you choose. Mortgaging a property allows the bank to take possession much...

Usually if you can get a loan with x coll then you could also get it without x coll.