Hi Acorn,Yes, most definitely. Personally, I have been...

Hi Acorn,

Yes, most definitely.

Personally, I have been restructuring a number of cross-secured facilities over 4 or 5 properties. In most cases the client has gone to their bank for another loan for a purchase, the bank has simply rejected, due to their exposure/property vals. We then ascertain how much funds are required from the new purchase and go to work.

Once we know the funds required for the purchase we order valuations upfront. If the valuations come in short we simply move to another lender until we get the valuation required. The alternative to this is applying for a loan with the bank on the basis of your property being worth 500k, when it comes back at 450k the deal goes to pieces and you have a credit enquiry on your CRAA.

There are indeed more fees but they are minuscule in the overall scheme of things when it comes to the difficulties when cross-securing restricts your future investments.

It does indeed add to your costs, if you have significant break costs, you can look at it as coming up with an extra 10k now OR borrowing that 10k over a 30 year period, while you will payback almost double the amount, in 30 years time your equity would have increased significantly and so would have the cost of living.