Ive taken out my 1st IP loan, borrowed 100%. The lender has taken both my PPOR & IP as security. How much do I have the pay down the IP loan before the bank will release the security against my PPOR? Once I’ve paid down the loan enough to enable me to have the security lifted how do I go about doing it? Is it a straight forward process or very complicated?
Probably should have asked this before settling the loan? What did your mortgage broker say? Are you actually cross colled (is there now only one loan?) or do you have two separate loans? your post lacks important details.
When you take out a loan, you need to ensure that the loan stands by itself. A decent broker who understands the ramifications of crossing loans will do this for you. Or, an easy way to ensure that you don't have loans crossed is to go to a different bank. Too late now. If you wish to borrow 100%, draw your equity out of the first property into a separate loan. Then the balance should be another loan. You would have 3 loans for two properties this way with clear indications of the purpose of each loan.
Is our finance approved or not? Feeling frustrated!! This has been raised before. What did you ask your broker about the cross coll? Is it cross col or not? If so why did you sign it? it reads like you found a property you liked, got emotional and signed before you had your finance sorted. For newbies: finance is FIRST, before inspections, before signing, before thinking about buying.
Hi, first time poster. No idea nor experience in property investing. How do you go about drawing equity?
Drawing equity means borrowing more, either as a loan increase or a second loan, against a property you already own. But this information is useless unless you can put it all together.
I think this may just be wording, but OP note you could have two loans and be cross collateralised. Each loan will have both properties listed as security. Look at your loan docs to determine, but from your description in OP it sounds like you are crossed as others have referred to above.
We have seven loans, all crossed. We didn't know any better back then, and cannot change things now, though we are slowly reducing the loans. We recently swapped two properties (plus our own house) as security for our townhouse block plus our own house. So we now can do what we like with two houses that the bank held titles to until just recently.
Just split the loan so part is secured by the main residence and part by the investment property. If you do it right you can maintain deductibility and remove the cross coll
