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 Cross
Collateralization of Residential Mortgage Loans
Cross-collateralization of
another residential property can be used to mitigate the lender's exposure.
Cross-collateralization can be
used to offset risk factors in a transaction. This can be especially
useful with high end properties and high loan amounts. The property being
cross-collateralized must be located in the same state as the subject
property.
Not permitted in Texas.
This feature is available on portfolio loans such as the Option ARM and the
Flex 3 and Flex 5 (fixed for first 3 or 5 years).
The
property being cross-collateralized must be appraised and insured according
to standard guidelines.
Reasons to use cross
collateralization:
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Avoid contingency of
selling your current primary residence when purchasing a new primary
residence |
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Avoid expensive
bridge loans (bridge loans normally involve 2 sets of closing costs)
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Eliminate the need
to liquidate investments |
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Effective 100% financing with stated income and assets
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No private mortgage
insurance |
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Save on closing
costs |
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Eliminate the
expense of refinancing your current loan which may not even be an option
if it is already listed for sale. Almost all lender refuse to
place a new loan on a listed property. The cross collateralization
program does not prevent you from listing your current residence.
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Here's an example of
using cross collateralization to move up to a more expensive home.
Income and assets would be stated but not verified. Higher loan to
value ratios are available, up to 80%.
| Purchase price of new home
Value of current home |
$800,000 $550,000 |
| Total real estate value Loan to value
ratio guidelines (varies with transaction type) |
$1,350,000 x 70% = $945,000 |
| Mortgage on current home |
- $135,000 |
| Final loan amount (cannot exceed 100% of purchase
price of new home( |
$800,000 |
Call Bill Meyers for additional details at 877-994-9589.
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This website is not a solicitation for
mortgage brokers
Rates vary with geographic location, transaction type, credit scores and
other factors
APR is abbreviation for annual percentage rate
Rates change frequently and these rates may not reflect the latest market
conditions
Expressed interest rate may change or be unavailable at commitment or
closing
Most rates based on primary residence, purchase transaction
Cash out refinance rates may be slightly higher
Some loans may have pre-payment penalties
Rates on some programs may require higher down payments
This is only a brief summary of rates and programs and possible fees, call
for additional information on underwriting requirements
and program limitations. Guidlines posted here are general in nature
and subject to change without notice.
Rates must be locked by phone or in person.
Mortgage calculators are believed to be accurate but results are not
guaranteed
All information published on this web site is believed to be accurate but
cannot be guaranteed, errors may occur
This site has been built and is maintained by Bill Meyers
Bill Meyers is employed as a mortgage loan consultant for one of the
nation's largest residential lenders. Bill works as an employee and
not a mortgage broker. This is Bill's personal web site and not
the official web site of any bank or mortgage company.
Please consider all information posted on this site to be general in nature
and representative of mortgage rates and policies that may be available from
various sources. Bill is located in Naples Florida. Bill can be
reached on his cell phone at 239-566-8484 or toll free at
877-994-9589. Please call for additional information.
Closing Costs (Refinance)
Closing Costs (Purchase) Contact
Bill Meyers
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Needed For Loan Approval
Mortgage Rates
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cost loan Lot loan information
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Calculator No income
verification programs Notes
regarding APR
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Equal Housing Lender
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