Company Title is a unique form of property ownership in that you own a number of shares in a company which in-turn entitles you exclusive use of a particular lot in a building/complex. There are some important things to be aware of as it relates to lending, outlined below;
· There are limited banks who will accommodate company title. Around six mainstream banks will accept this form of title.
· You need to make sure there are a minimum of 4 or 5 units in the block.
· The loan to value ratio as a maximum loan against the property’s value is capped at 80% with all the banks, so no lenders mortgage insurance is permitted even if under a special package for solicitors / doctors who get lenders mortgage insurance waived. I.E a bank will only lend $800K on a $1M property which is company title.
· The purchaser will need a long settlement. Minimum generally needed is 8 weeks, ideally 10 weeks. This is due to the quite large amount of paperwork involved with the bank and the people who need to sign it. Not just the borrower signs the bank documents, the company secretary and director also need to sign some documents. The banks solicitor also needs to review the company documents which takes time too.
· Please also consult with your solicitor regarding this form of title.
If you have any questions or need help please reach out. Tom.
Written by Tom Morison
