Clueless about cross-collateralisation - Bris splitter block

Discussion in 'Loans & Mortgage Brokers' started by VeronicaR, 15th May, 2018.

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  1. VeronicaR

    VeronicaR Well-Known Member

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    Hi Property Chatters,

    I've had a good read of existing forum posts, but I'm still clueless. I'm sorry if this is a super obvious question.

    We have a splitter block in Toowong (1 title, 2 lots - no subdivision required, just title split). The works are well progressed, and we're about to apply to our bank for consent to split the title. We will then attempt to sell one of the lots (the vacant one) ASAP.

    This will leave us with a loan/s cross-collateralised across both properties. Should we be refinancing now? Or wait till we sell the vacant lot?

    The existing house will be on its own block, with the final extension specified in the DA pending (need some funds from sale of block to complete the works). I imagine it would be pretty awkward to have a house under renovation valued...

    Any tips :)?
     
  2. Terry_w

    Terry_w Broker, Lawyer, Tax advisor, Debt Recycle advisor Business Member

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    No need to refi. Just get remaining one revalued by bank so that they can release security of these one being sold.
     
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  3. VeronicaR

    VeronicaR Well-Known Member

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    Terry, will the fact that the house is half-way through a reno kill our valuation?
     
  4. Terry_w

    Terry_w Broker, Lawyer, Tax advisor, Debt Recycle advisor Business Member

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    Possibly. Depends on the extent.
     
  5. VeronicaR

    VeronicaR Well-Known Member

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    Thank you Terry. The extent will be reasonably significant... to give context it is a raise and slide of a queenslander. There will be only one egress from the property (I think that means it is not technically habitable until we build the extension which includes the stairs at the back).

    Hopefully there's some way we can get the valuation based on the completed works?

    I'm a bit worried now!
     
  6. Terry_w

    Terry_w Broker, Lawyer, Tax advisor, Debt Recycle advisor Business Member

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    Yes that may be a problem, but you could just split at the point of sale.