Cross colateralise or split?

[attrill]

I read with interest Rob's magazine interview on cross colateralisation. It has helped me build up my portfolio, but I am wondering now if I should start to separate the loans now that each loan would be <80% of the value of the property. I could refinance each property to take out the equity and add these together to create another deposit, or just refinance the whole lot and add another property into the mix of cross colateralisation.

Any thoughts would be much appreciated.

 

[Qlds007]

Hi Attrill

It unfortunately is not as easy as it sounds.

Remember when you start unravelling the securities your current lender will want to revalue the remaining properties before they will release any individual security.

They may have changed their current lending policy in regards to serviceability or the lvr for each acceptable securities etc so there is no reason why they will release any security without a reduction in your existing lvr or additional security in the way of cash etc.

Might be time to spread your risk to enable you to move forward.

 

[Rolf Latham]

Hiya

If convenience is the major beneft of the current and future xcoll, then break it up now,

if there are some good commercial benefits for the xcoll, then you may have no option.

there arent many deals where the latter is the case, but they do exist

ta
rolf

 

[attrill]

Thanks for the replies. It is always good to get input from others before making a decision.