Visibility of mortgage when cross-colled

[Trogdor]

Hi,

Can somebody pls conform something for me.

Assume a loan of $X is secured against two properties. Property A gets sold and one does a mortgage search on this property.

Assume this search would show the total loan amount which is secured against both properties - and could be in excess of the sale price or value of property A?

Thank you !!

 

[cmason]

If one of the securities is sold I believe you would need to re-finance with the single security

 

[Peter_Tersteeg]

If you sell one property, the lender will likely revalue the second property and possibly reassess your ability to service. If the valuation isn't high enough, they'll ask you to reduce the second loan from the sale proceeds (you may be required to do this even when the valuation is high enough). Too bad if you had other plans for the money.

It's not strictly a refinance, but given all the verification the lender could do, it can look like a refinance.

 

[marty29]

I assume if you are referring to the title? And if the loan amount would appear on the title? The answer is no... in WA anyway.

Another reason not to x-coll, as you mostly likely to lose control of the sale proceeds.

Cheers.

 

[Trogdor]

Thanks guys.

I'm referring to the mortgage amount shown on a s27 (early deposit release) request when I say "search". Assume if the amount is very high by reference to to property value then that loan may likely be secured against another property too.

 

[The Sniffer]

Generally it takes a couple of days to get a new valuation on the property you are leaving with the bank. The bank then sets an amount (assume 80%) of the new valuation as the 'funding limit after your sale'

The money the bank needs to collect to release the property is the amount listed on the s23.

Which bank are you with?

Most majors do a few hundred of these a week so you won’t have anything that has not been done 100s of times before – you just need to be speaking to the correct people...