Ive always held the belief that cross collateralisation is a big nono
tho I can't articulate exactly why when the mortgage broker asked me
What I want to do
is that I have 4 properties in personal name
I want to extract extra equity from the 4 properties - approx 300k
The new loans/ loan will be in a trust in the name of the trustee
Now - should I take out 4 separate loans in the trust - against each property to 80%LVR
Or cross collateralise and put it into 1 loan - in the form of a LOC
1 LOC would minimise a lot of paper work for now
What are the disadvantages of cross collaterlisation in this situation
The mortgage broker couldnt see any big problems with it
even if I sold properties or wanted to go to another bank for loans
What do you guys think
tho I can't articulate exactly why when the mortgage broker asked me
What I want to do
is that I have 4 properties in personal name
I want to extract extra equity from the 4 properties - approx 300k
The new loans/ loan will be in a trust in the name of the trustee
Now - should I take out 4 separate loans in the trust - against each property to 80%LVR
Or cross collateralise and put it into 1 loan - in the form of a LOC
1 LOC would minimise a lot of paper work for now
What are the disadvantages of cross collaterlisation in this situation
The mortgage broker couldnt see any big problems with it
even if I sold properties or wanted to go to another bank for loans
What do you guys think