Is it called cross-security? I have 2 properties. Property A is 80% LVR and property B is 50% LVR. The broker suggests me to borrow more money with property B as security to put in property A, so to reduce the LVR of property A. I understand if cross security, it is a high risk strategy, like if we cant pay the debts, we can lose both. When we sell or refinance in the future, it would be more complicated. Is that correct? Thank you.
Crossed security is using 2 properties as security for 1 loan. What they have suggested may or may not involve this. It may not. But why are they suggesting it is the question I would be interested in
The broker said there will be separate loans, and that will be fine. 1 loan for property A (70% LVR), 2 loans for property B (includes 1 loan for property B and another loan to cover the LVR 10% of property A). Could you please give me a second opinion if that is ok? Thank you , Terry.
If that is all there is to it you could could have 2 splits against property 1 and use one split to pay down the investment loan. All loans having 1 security and tax deductibility maintained if you do it right - best to get some tax advice too.