Broadening banking horizons?
Question from Daniel updated on 1st August 2012:
I own my home and I am mortgage free. I have three rentals with the same bank with 60%, 80% and 85% LVRs. I have a personal guarantee with the bank. I plan to buy more rentals but want to do so using another bank. I wish to have no personal guaranteed attached to my assets. What do you recommend I do to get out of my current situation?
Our expert Kris Pedersen responded:
You will generally find that banks always want to take a personal guarantee. If you structure yourself correctly and act with a reasonable level of prudence you should not have too many issues. I would just check that your rentals are in no way hooked back into your paid off owner-occupied property. It is hard for me to say without knowing more actual numbers but based off what you have said with the LVRs on the individual rental properties, they should be able to stand alone without requiring cross security into your own home. Feel free to contact me directly to go through your situation in more depth.
Kris Pedersen of Kris Pedersen Mortgages is a commentator on property and finance. His team sources top finance strategies. www.propertyfs.co.nz