Cross Collateralization Loan [Do Not Make This Mistake]

[@MortgageBrokerAustralia]

For heaps of free home buying tools and resources check out www.huntergalloway.com.au/hub

[@Jindarella_]

These videos make me realise the benefits to having a mortgage broker, AND doing your own research. Thanks HG. Ps. My book arrived yesterday, thank you!

[@MortgageBrokerAustralia]

@Ms Jindarella, thank you so much that means a lot to us!! Hope you enjoy the book, and any other questions let us know. Cheers, Jayden.

[@francismoana9486]

I just recently purchased an investment property and found out that it is cross collaterised. What is the best way to get it to a stand alone investment property?

[@MortgageBrokerAustralia]

Hey Francis, damn. You’ll have to get the properties re valued and pretty much do a new loan application (even though you’re with the same bank) to seperate it back out. If you’ve had to pay Lmi you’d potentially have to do it again but Happy to have a quick look at it for you shoot me an email and I’ll explain options and next steps Jayden.vecchio @ huntergalloway.com.au

[@georgiachristinel5688]

Keep up the great work guys!

[@MortgageBrokerAustralia]

Thanks! Will do!

[@198746779838]

Im not 100% sure but i think one of the main points of seperating your mortgages was missed. If you have 3 properties that are cross securitised and you want to sell one of them to buy another property the bank has a right to take that money and pay off your other liabilities or houses. You may not get the full amount the house sold for. The banks are tricky so ensure this isnt the case with your bank before anything else.

[@MortgageBrokerAustralia]

Yeah exactly having the properties stand alone gives you more control over your properties when you go to sell/refinance in the future.

[@AssadHamid]

If a person has fully paid property, how that can be beneficial to get mortgage approval for other one. (If the owner do not have any job or self employed from few months.)

[@MortgageBrokerAustralia]

Hi @Assad Hamid great question. At the moment it may be of no benefit due to responsible lending laws. Essentially this means lenders need to prove they're lending responsible. So, even though you might own a property valued at say $1,000,000 and only looking to borrow $100,000. Under responsible lending legislation the lender need to prove they're lending responsibly. Meaning the applicant is able to afford the loan. So, if the applicant didn't have an income, would be considered lending responsibly, even though the bank has nothing to lose (because they have a property worth $1m, worst case they just sell it)! This all might change next year as legislation looks like it'll be removed.

[@AssadHamid]

@@MortgageBrokerAustralia Thanks alot for your time

[@a.r.jackson4590]

Hi @Assad Hamid did you find anything more out? I'm in a similar boat. Unfortunately, I can't do a refi on my free and clear home, because I can't show proof of income 🤦🏾‍♀️

[@AssadHamid]

@@a.r.jackson4590 yes i find but cant disclose hare.

[@myroslavmot]

Thank You

[@MortgageBrokerAustralia]

You're welcome

[@yiannistavrou6588]

Is there a situation in where you can borrow more than the purchase amount of property b? I'm assuming based on the equity in property a

[@MortgageBrokerAustralia]

Thanks Yianni, that's right. Provided there is equity, you'd be able to borrow more than the purchase price no drama's.

[@MortgageBrokerAustralia]

Thanks Yianni, that's right. Provided there is equity, you'd be able to borrow more than the purchase price no drama's.

[@MortgageBrokerAustralia]

Thanks Yianni, that's right. Provided there is equity, you'd be able to borrow more than the purchase price no drama's.

[@jay2aussie]

But if my 1st property is my PPR then the interest on the deposit loan I take out of equity in my PPR isn’t tax deductible? If I cross collateralise in order to take out the entire purchase amount of the new property, then 100% of the interest is tax deductible because it’s an investment. Am I missing something?

[@MortgageBrokerAustralia]

Thanks Jay, great question. Might be an idea to speak with a tax accountant as we're unable to give taxation advice. From a very general point of view, the tax office look at the purpose of the funds rather than which property the funds are secured on. Effectively if you use an investment property to borrow money for a personal use, the tax office won't count that as deductible. However, always best to speak with an accountant where they can assess your personal position and provide the right advice.

[@officialspock]

How do I make sure banks/broker wont do this cross collateralisation?

[@MortgageBrokerAustralia]

Effectively they'll need to do two separate applications, so there will be 2 application reference numbers. Also check out: www.huntergalloway.com.au/cross-collateralized/

[@peterkoulogeorgiou4895]

Whene properties go up for many years equity was never a problem it was serviceability and whene you have that problem you don’t get the loan. Banks work on both something that you guys on making videos never mention and I don’t know why.spriukers

[@MortgageBrokerAustralia]

Thanks for watching!