Cross collateralisation is using multiple securities (properties) for the securing (or payment) of a loan/s. It used to be the way loans were structured to borrow enough to cover a properties purchase price plus purchasing costs when there was equity available in another property.

As an investor you’ll want to know that cross collateralisation isn’t always the best way to borrow. There are certain situations when it is a useful tool but more often than not it is not in your best interests are the borrower (it benefits your lender greatly though!).

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