Cross collateral?

[Jamie M]

Thanks Rolf for the link.
Marty, yes he said he always been with the big banks & now with this franchise.
Now I'm worried about how our other loans have been set up. Am I able to call the lender to ask?

You could.

Otherwise have a look over your old loan offer docs - they will tell you which properties have been used to secure the finance.

Cheers

Jamie

 

[Rolf Latham]

Now I'm worried about how our other loans have been set up. ?

Be concerned, but not paranoid.

if its fixable, then fix it, if its not fixable dont lose sleep, choose and move

ta
rolf

 

[james55]

The only time I would cross loans is if I'm looking to release a property outright but there's not enough equity in a single property to do so. Ie requires equity from a few properties.

Off topic -Terry, how would you apply asset protection to an unencumbered property?

 

[Terry_w]

The only time I would cross loans is if I'm looking to release a property outright but there's not enough equity in a single property to do so. Ie requires equity from a few properties.

Off topic -Terry, how would you apply asset protection to an unencumbered property?

What are you trying to protect from?

encumber it - some asset protection.
Argue for a resulting trust - some.
sell it for full market value - spend money
Enter into a long lease
sell an option to a related party
etc

 

[james55]

What are you trying to protect from?

encumber it - some asset protection.
Argue for a resulting trust - some.
sell it for full market value - spend money
Enter into a long lease
sell an option to a related party
etc

Thanks Terry. No need to protect from anything yet. An unencumbered title just seems a bit exposed.

 

[albanga]

I may be wrong but the only real benefit I see is small equity releases?
For example if you own 4 properties who each go up by 10k then it's much easier to value the portfolio and use the extra 40k as opposed to if they were all seperate loans?

 

[Rolf Latham]

I may be wrong but the only real benefit I see is small equity releases?
For example if you own 4 properties who each go up by 10k then it's much easier to value the portfolio and use the extra 40k as opposed to if they were all seperate loans?

there are some justifiable examples where xcoll is ok to use.

that circumstance MAY be one.

Easy implies convenience.

Think convenience food, ok every now and then, but consumed daily will have a long term effect.

ta

rolf

 

[albanga]

Thanks for clarifying Rolf and good analogy.
Must say I love your passion for anti X Coll. Your probably on the banks top 10 hit list. Haha

 

[Rolf Latham]

Your probably on the banks top 10 hit list. Haha

most bankers and brokers that employ the practive dont know any better.

Thats how they have "always done it" , and the repercussions of same are what they are.

A mentor recently reinforced that 5 of things we know, we know pretty well, then there is 5 % of stuff that we know we dont know well, then there is the 90 % + that we dont have a bloody clue........ we dont know that we dont know.

This is why its very important to keep learning and keep an open mind as possible.

ta
rolf

 

[Terry_w]

Bankers should try to cross collateralise you. They are working for the bank and would like to tie up much more security than they need = safer for the bank. They would also be interested in preventing or making it harder for you to leave.

 

[Rolf Latham]

They would also be interested in preventing or making it harder for you to leave.

to be fair to the banker side of the equation, mostly, they arent aware( at least thats my experience and perception).

the same idealogy can be used to limit broker hopping.

On the broker side though I see a fair bit of xcoll mixed with fixed rates......... a nasty combination of potential retardants in growing a portfolio.

ta
rolf

 

[Terry_w]

True, most don't understand, but I have heard from at least 2 ex bankers that they were instructed to cross coll were possible.

 

[Rolf Latham]

True, most don't understand, but I have heard from at least 2 ex bankers that they were instructed to cross coll were possible.

aka

"maximum contribution' for banker talk I recall


ta
rolf