Selling to upgrade x-collateralised PPOR

[Lukey13]

I would like to sell my current PPOR so as to upgrade to another. However, currently I have another loan against it for my recently purchased IP.

My question (which probably has a very simple answer) is how do I go about this in terms of loan structure and process?

Further details of my scenario are:
PPOR - valued at $430K - current mortgage $240K + $79K IP loan secured against PPOR
IP - valued at $340K - current mortgage $254K
Prospective new PPOR will cost approximately $550K

Will this be as simple (not!) as teeing up the settlement of the new PPOR purchase with the old PPOR sale so that the $79K IP loan can be immediately transferred and secured against the new PPOR?

Or can I sell the current PPOR first, use the proceeds to "temporarily" pay out the IP loan, and then upon purchase of the new PPOR draw back that loan and secure it against the new PPOR. Only problem is I don't have an offset account for any of my loans due to fixed rates.

Also, if I really needed to, I could have the IP revalued and then borrow some of the $79K debt against it's increased value up to 80%.

Any help would be kindly appreciated.

 

[Lukey13]

So has anybody else been through the process of switching (upgrading) their PPOR which had IP debt against it also?

 

[yo yo ma]

So has anybody else been through the process of switching (upgrading) their PPOR which had IP debt against it also?

No, but I thought I would bump the thread for you... maybe this would have been better posted in the finance section?

 

[travelbug]

PPOR - valued at $430K - current mortgage $240K + $79K IP loan secured against PPOR
IP - valued at $340K - current mortgage $254K
Prospective new PPOR will cost approximately $550K

Also, if I really needed to, I could have the IP revalued and then borrow some of the $79K debt against it's increased value up to 80%.

Any help would be kindly appreciated.

Hi. I haven't done this but have been looking into it as I may be in the same position in a few years.
My understanding is that the bank will want you to pay down the loan (ie $240 + $79. Luckily the IP is under 80% so you won't have to pay any of that. So if you sold fisrst you would have to pay that then refinance (I guess).
Your idea of getting the IP revalued is a good one. That my plan if it happens.

I wish I knew more about cross collaterisation (sp?) before I started.

I'd speak to the financial advisor of the bank. They will let you know what the draw down figure is.

 

[Peter_Tersteeg]

It depends on the detail of the structure. You may be able to split your new PPOR into two loan accounts, the second of which is the $79k for investment purposes.

The LVR for your existing IP loan on it's own is below 80%. As a result it may be possible to structure the finance for your new PPOR without the need to cross-collateralise at all. It would be the detail in the current structure that determines the ability to do this.