Company Title Mortgage
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 1960s. The block of units is owned by a company and the owners of the units buy shares in the company.
Ownership of particular shares in the company denotes ownership of a particular unit. The main problem with company title properties is that the consent of the other owners may be needed to sell, lease or mortgage your unit.
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 interest rates available.
Do you need help to finance your purchase? Please call us on 1300 889 743 or enquire online and one of our mortgage brokers will call you to discuss the mortgages available for your company title unit.
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 costs and delays due to the ownership structure. There may also be less people who want to buy a company title unit which means the sale process may take longer than usual.
Banks don’t actually use a ‘mortgage over land’ as they do with other properties, 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 1960s, they are still assessed in the same way by Australian banks.
Why are small blocks harder to finance?
Recently some banks have had trouble registering their charge over the shares in the company for small blocks of units. For this reason some lenders have put in place a policy that they do not finance units if the block has less than five units.
These lenders also ask for some additional information:
- Full bank valuation is required.
- Memorandum and articles of association of the company.
- ASIC search confirming the company is a Home Unit Proprietary Company.
We have lenders that will accept apartments in small blocks (1 – 4 units) on a case by case basis.
What about company share title?
In Victoria there is a similar type of title called a ‘company share title’. This is acceptable security for a home loan for some of our lenders.
Apply for a company title home loan
Borrowing money for a company title unit is not as straight forward as borrowing money for a normal apartment. By working with a specialist mortgage broker you can find out who will lend you the most money and still give you a rate discount. Please enquire online or call one of our mortgage brokers on 1330 889 743 to discuss what loans are available for your company title unit.
Low doc loans are available for some company title units depending on your situation and the location, saleability and legal structure of the title.