Experience with un cross collatoralize loans

Hey Experts

I'm with CBA and my loans are a bit of a mess with plenty of cross collatoralization.
PPOR paid off
IP 1 - PPOR is held as collatoral
IP 2 - PPOR and IP 1 is held as collatoral
IP 3 - PPOR and IP 2 is held as collatoral

All loans have a LVR of less than 70%. Anyone have experience with CBA if I want to untangle this mess and have not cross collatoralization at all?

I was looking to refinance IP 1 with someone but thought I'd check if this thing will be an issue or will the settlement team on the other end manage this for me?

Thanks

 

Should be simple to uncross first

 

Do you know if CBA would charge me for this thanks Terry

 

yes they would. you will need to discharge mortgages. valuations needed too but these may be free.

 

It should be easy enough to do this if the lvrs are low enough across the board - it gets a little more complex if any property is higher lvr and you need to separate loans and have different securities to maintain deductibility.

I wouldn't hand this over to a random staff member and assume they'll get it right, tbh.

But all in all it certainly sounds possible.

 

CBA love cross col.
I used my PPOR for deposits and bought each property at 80% so they were all stand alone.

I was refinancing with them and when they presented all the docs every property was listed on every loan. The broker (from the bank) assured me they weren't crossed. LOL

I refused to sign. They drew up new docs the next day, with 1 property on each doc. This was important to me as my strategy was to sell half then retire.

 

If each property has an LVR of 70% or lower, uncrossing is likely to be fairly easy. There's two ways to go about it.

1. Simply do a partial discharge for each loan, removing the secondary properties as security. I'm not sure what this will cost, but almost certainly less than $500 per property. It could be significantly less. Quick and easy, no applications required.

2. Refinance the portfolio to another lender, setting the loans up without cross collateralisation. It'll cost more, about $700-$1000 per property and it will take about 6-8 weeks, but there are other lenders with significantly cheaper loans than the CBA. It may save a lot more in the long run.

As always, the best solution depends on the specifics of the situation.

 

Can be easily done, at a minimum If total LVR is 80% it can be done.

You can refinance IP1, but it will be messy unless everything is uncrossed.

Who's idea was it to cross everything to begin with ?