# XColl??

#### Catapult

Hi,

What is the general strategy when obtaining a loan if you already have property? Do you borrow say 80% LVR on the new IP? Or do you lump the loan all in together? (is this called XCOLL?)

Thanks.
Tim.

You borrow 20% for the deposit plus another 5% for purchasing costs secured against your existing property, then you borrow the other 80% of the purchase price secured against the new property.

Yes Xcol is when your lender take more than one title to secure a loan.

What is your current loan amount and approx value? What is the purchase price of the new property?

Regards

Shahin

Hi,

What is the general strategy when obtaining a loan if you already have property? Do you borrow say 80% LVR on the new IP? Or do you lump the loan all in together? (is this called XCOLL?)

Thanks.
Tim.

Hi Tim

Its called Xcoll, meaning cross collateralised, but in maths , X is an unknown quantity

Should you use Xcoll ? in Most cases NO..........

http://somersoft.com/forums/showpost.php?p=120656&postcount=6

If you have the equity to do the XCOLL then you have the equity to do it the "right way"

Borrow approx 25 % ( 20 % deposit +costs) secured only to the existing property, and 80 % secured ONLY to the new place,and make sure the loan docs only state ONE property for each loan set

ta

rolf

Keep the loans separate even with the same lender. Lumping the loans together so you get '100% finance' is cross collateralisation and should be avoided.

continual redraw facility?

Thanks Rick, Rolf & Aaron,

All very clear.

So now, as I understand the PIA software, each property has its own equation, which may or may not show the required 25% equity needed to invest in IP #2 ??

So therefore each loan needs to have some sort of continual redraw facility?

Thanks Rick, Rolf & Aaron,

All very clear.

So now, as I understand the PIA software, each property has its own equation, which may or may not show the required 25% equity needed to invest in IP #2 ??

So therefore each loan needs to have some sort of continual redraw facility?

You just need to do good forward planning with your credit structure.

Quite a few "educators" and financial gurus take the short route and just cross the lot............sometimes that can have benefit especially with weeny loans on bush props, but can be a loaded gun with average metro props

ta

rolf

You borrow 20% for the deposit plus another 5% for purchasing costs secured against your existing property, then you borrow the other 80% of the purchase price secured against the new property.

Yes Xcol is when your lender take more than one title to secure a loan.
Rick,

I read through your 'Blue Print' - very informative and inspiring. My question concerns:

"So in year 11 ( 10 years since your 1st Ip) you have 250K equity in IP1 you can draw out (up to 80%) Tax free to fund your lifestyle or invest with."

Does this mean you further borrow 250K to live on? How does that work? Wouldn't borrowing money to live on be troublesome?

Tim.

Rick,

I read through your 'Blue Print' - very informative and inspiring. My question concerns:

"So in year 11 ( 10 years since your 1st Ip) you have 250K equity in IP1 you can draw out (up to 80%) Tax free to fund your lifestyle or invest with."

Does this mean you further borrow 250K to live on? How does that work? Wouldn't borrowing money to live on be troublesome?

Tim.

Tim, I've PM'd you so as not to take thread off topic.

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