24 Apr 2022

Cross Collateralisation: What Customers Can Expect?

Property Investing

Financing portfolios of property investments becomes a cumbersome task. Since lenders accept property equity as collateral, investors can avoid placing cash deposits on new property purchases. The process begins tying home loans together now as cross collateralisation. When the Australian housing market is humming along, it’s a good deal. If the market tanks or bottoms out, it can put the investors in a precarious situation. 

Mortgage House is among the lenders that will help clients with cross securitising their investment properties and portfolio. After you become a Mortgage House client, you receive access to our niche solutions. You’ll fall into one of three brackets, each has a set of benefits such as faster application processing. 

After you finance your first property through Mortgage, we’ll take a look at the first property. It receives an appraisal and we determine how much equity it has accrued. If the property has enough equity, we use it as collateral. This ties both properties together financially. However, no new funds came out of your pocket directly. You can continue the process as you acquire more properties and add them to your portfolio. 

It’s possible to reach a point when too much cross securitising has occurred. At this point, our Mortgage House loan specialists will discuss your options. Ideally, rental income from the properties will net more than enough to pay down the loans. 

Cross Collateralisation and Property Investing Conclusion

In some cases, cross collateralisation makes sense. To discuss your property financing options, contact our loan specialists at Mortgage House today.

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