What is a company title unit?

A company title is an older style of title that was commonly used for blocks of units before the use of strata titles became common around the 1960’s. The block of units is owned by a company and the owners of the units buy shares in the company.

Ownership of particular shares denotes ownership of a particular unit. The main problem with company title is that the consent of the other owners is needed to sell, lease or mortgage your unit. Talk to your conveyancer to find out exactly what restrictions apply to your particular property.

How much can you borrow?

First home buyer: 85% of the property value.

Investor: 85% of the property value.

Guarantor mortgage: 100% of the property value plus costs.

Low doc: 60% of the property value (80% is available if you have BAS statements to support your income).

Discounts: Competitive professional package and basic loan discounts are available.

Note: Company title has some restrictions with many lenders refusing to lend more than 80% of the property value. 90% loans may be available to strong applicants who have been in their job for 2 years, have at least 5% genuine savings & have a perfect credit history.

Why are the banks conservative?

Banks tend to reduce the loan amount for company title properties because in the event that they have to sell the property to repay the loan, they may have additional administration and delays due to the ownership structure. There may also be less people who want to buy a company title unit, so the sale process may take longer than usual.

Banks don’t actually use a “mortgage over land” as they do with other properties, but rather they take security over the shares you own in the company. This in turn creates a more involved lending process which many banks prefer to avoid due to the additional legal costs.

Although many modern day company title apartment blocks have less restrictions than the older blocks from the 1960’s they are still assessed in the same way by Australian banks.

Apply for a company title home loan

Borrowing money for a company title unit is not as straight forward as for a normal apartment. By using a specialist mortgage broker you can find out who will lend you the most money and still give you a rate discount.

Low doc loans are available for some company title units depending on your situation and the location, saleability and legal structure of the title.