4 Keys to Loan Structure: Part 1

Getting the structure of lending correct is critical for 4 very important reasons... today we look at PART 1

1) Making sure your interests are protected (instead of the banks!)

When you have more than one property the structuring of your loans becomes critical.
If you have been dealing with a lender directly then it is very likely that you will have the following situation:

• The 1st loan you set up (to buy Property 1) will be secured by just that property
• The 2nd loan you set up (to buy the Property 2) will be secured Property 1 AND Property 2
• The 3rd loan you set up (to buy the Property 3) will be secured Property 1, Property 2 AND Property 3.,. and so on.

This is great for the bank - if something happens and you can not pay the second loan then they can sell Property 1 AND Property 2 without your consent!

To protect your interests and give you as much control as possible the loan structure should ensure that each loan is secured by just one property. With this being the case, the bank will only have easy access to the property securing the loan that is in default. They will need to take legal action to access any further assets giving you valuable time to get up to date on loan repayments.