Hi there,
The topic of this thread is from ozperp's blog note below (thank you ozperp!):
http://www.somersoft.com/forums/blog.php?b=70
I must admit I've read a lot about this x-coll monster over the years and avoided it like the plague (only to later find out about the ''all monies clause"!), but without really understanding the implications of it (positive and negative)... but I'm now starting to see an upside to it to help me grow my property portfolio going forwards with greater leverage and economies of scale.
I'm thinking in the next 6-12 months of jumping in to bed with one lender that I seem to get along with well and is somewhat lenient with their lending criteria to me, and going the way of "portfolio lending" and "extreme cross-collaterilisation", as ozperp describes so well in her blog note above...
I have followed the general advice touted on this forum to date re. avoiding x-coll wherever possible, and it's worked so far.
However, for me to continue going forward with appropriate leverage and avoid the wrath of the LMI crowd, I'm starting to think that at some point in the not too distant future I may have to ''committ'' unconditionally to one lender... effectively becoming by main business partner.
Or alternatively, have two facilities with 2 different lenders, but each one x-colled up completely...
Has anyone else faced this juncture?
You can effectively purchase 106% of purchase price without LMI as long as your total portfolio LVR remains below a certain figure ??70-80%...
The main downside I see is if you are looking to increase your borrowings and they do a valuation on all of your properties at not an ideal time, then the portfolio LVR may not be favourable and you might get stuck...
Thanks for your thoughts...
The topic of this thread is from ozperp's blog note below (thank you ozperp!):
http://www.somersoft.com/forums/blog.php?b=70
I must admit I've read a lot about this x-coll monster over the years and avoided it like the plague (only to later find out about the ''all monies clause"!), but without really understanding the implications of it (positive and negative)... but I'm now starting to see an upside to it to help me grow my property portfolio going forwards with greater leverage and economies of scale.
I'm thinking in the next 6-12 months of jumping in to bed with one lender that I seem to get along with well and is somewhat lenient with their lending criteria to me, and going the way of "portfolio lending" and "extreme cross-collaterilisation", as ozperp describes so well in her blog note above...
I have followed the general advice touted on this forum to date re. avoiding x-coll wherever possible, and it's worked so far.
However, for me to continue going forward with appropriate leverage and avoid the wrath of the LMI crowd, I'm starting to think that at some point in the not too distant future I may have to ''committ'' unconditionally to one lender... effectively becoming by main business partner.
Or alternatively, have two facilities with 2 different lenders, but each one x-colled up completely...
Has anyone else faced this juncture?
You can effectively purchase 106% of purchase price without LMI as long as your total portfolio LVR remains below a certain figure ??70-80%...
The main downside I see is if you are looking to increase your borrowings and they do a valuation on all of your properties at not an ideal time, then the portfolio LVR may not be favourable and you might get stuck...
Thanks for your thoughts...
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