What is a group title property?
Group title properties are very similar to stratum title in that you own the inside of the unit but not the outside or common property.
Like strata title, it can be difficult to qualify for a group title home loan because these properties usually tend to have restrictions.
How much can I borrow?
You can borrow up to:
- 95% of the property value with select lenders, whether you’re a first home buyer or an investor.
- 80% of the property value with a low doc loan.
- 105% with select lenders using a guarantor loan.
Competitive professional package and basic loan discounts are available.
Some lenders won’t accept group title properties but not all lenders are the same!
We can help you build a strong case with the right lender so please call us on 1300 889 743 or fill in our assessment form to find out how we can help you.
What do banks think of group title properties?
Not all banks are comfortable with approving group title home loans, and those that do may also restrict the amount you can borrow.
It has a lot to do with the complex ownership structure.
The owner of a group title unit actually purchases shares in a company, which in turn owns the remainder of the building, including the land and common areas like the stairwell and elevators, any courtyards and gardens, and shared entrances and roads.
In many ways, the borrowing restrictions are similar to those that affect company title properties.
A buyer is not issued with a Certificate of Title over the property which means the banks don’t actually use a ‘mortgage over land’.
Instead, they take security over the shares that a buyer owns in the company.
This structure can make it difficult for the bank to sell the property in the event that you default on your home loan.
We have good relationships with the lenders on our panel and there are some that don’t have a problem group title home loans!
What are the realities of owning a group title property?
The restrictions and costs
Apart from selling the property, there are other ownership restrictions and costs when it comes to owning a group title property.
Before signing, it’s best to have a solicitor review the sales contract carefully so you understand these restrictions and costs, which can include:
- Asking for permission from the strata title company to erect an external awning over your balcony window.
- High cleaning fees.
- Ongoing maintenance and repair fees for the shared facilities.
The body corporate
The body corporate is not actually the building owner or the developer but is instead a unit owner that is elected by the other unit owners.
Their role is to collect fees from the other owners for the maintenance of common areas while also managing the so-called sinking fund.
The sinking fund is leveraged for major repairs needed for the building structure, such as common walls and roofs.
Because of this, be aware that the fees charged by the owners’ corporation may be higher for older buildings.
Are group title properties a good investment?
A group title unit can cost less in upfront costs than buying a standard residential property.
This is mainly due to the fact that you’re purchasing a smaller living area.
However, it’s essential that you understand the by-laws and maintenance plan that govern the owners’ corporation.
Over the long-term, the costs can become exorbitant, particularly for older properties or those that are heritage-listed.
It’s essential you speak to a conveyancer so you understand the ongoing costs of property ownership so you can make an informed investment decision.
Apply for a group title home loan
Find out how much you can borrow with a group title home loan.
We’re experts in getting home loan approvals for unusual property types that aren’t always accepted by mainstream lenders.
Speak with one of our group title home loan specialists by calling us on 1300 889 743 or by completing our online enquiry form today.