Cross collateralisation

[MohanWei]

At present loans of both own house and IP is with the same bank and it is cross collateralised. Now I want to take either IP or my own house loan into different bank. My question is how to break cross collateralised? Is just by taking into different bank cross collateralised will be over? Any input to me will be very useful. thanks

Regards
Mohan

 

[Peter_Tersteeg]

It will come down to the valuations of the properties and the end structure you want. Restructuring at this point should be fairly straight forward but it's a good thing you're doing it before you've got to untie too many more.

Also keep in mind you don't have to move lenders to remove x-coll. It can be done internally.

 

[MohanWei]

Thanks Pete.

I will call bank manager at NAB and explain the loan structure to de-collaterise it now.

Regards
Mohan

 

[srini]

If you get stuck, there are lots of experienced Mortgage Brokers here that I'm sure will be happy to help you.

Good luck

 

[MohanWei]

Thanks Srini.

Let me talk to manger and I will see his attitude. If bad, I will go with brokers help

thanks again

 

[Rolf Latham]

The obvious question is why did the lender do it like that in the first place.

With NAB and Homeside you need to work hard it doesnt happen in the first place

As an aside to the original question, why do you want to move ?

ta
rolf

 

[Aaron_C]

The obvious question is why did the lender do it like that in the first place.

Because they can and do get away with it!

 

[Terryw]

You will just need to apply for a release of security. The lender will probably require a valuation of the remaining property to make sure it is enough to support the remaining loan. You can get this under way while you are applying for the new loan.

 

[Rolf Latham]

You will just need to apply for a release of security. The lender will probably require a valuation of the remaining property to make sure it is enough to support the remaining loan. You can get this under way while you are applying for the new loan.

This could cause a fuss with the outgoing lender.

I wont pick on any ONE lender here, but many have a cardiac arrest if they feel you are going the "split banking" route, and will want to be comfortable that they have an affordability and exposure window into the end position you are looking to achieve.

With quite a few lenders a partial release is credit critical, meaning that it needs to be approved beyond just the lvr

If you MUST do the parallel app, make sure you know how your current lenders position is on it before you allow the new credit hit.

ta

rolf