I’m looking to buy a property in Western Sydney with 40% deposit. The purchase price is $650,000 but it is a company title property include land and house. Are there any finance restrictions for company title properties?

Hi Ash,
Are you certain it is a company title and not Community title?
Can't recall seeing company title in Western Sydney.
If it is a community title, then that is fairly common and does not present a lending impediment
Happy to look at this for you.

Hi Ash,

Great question and as per Stephen Dinte does raise some questions.

Firstly, home loans for properties on company title are fairly straight forward with out any major difference or restrictions in comparison to any other title type. Other than the Loan to Value (LVR) needing to remain under 80%.
As you mention you have a 40% deposit your LVR would be 60% so would not present any major hurdles.

With regard to Dinte comment, it is unusual to see company titles in Western Sydney as they typically occur in the older parts of Sydney on units where Strata titles were not available at the time of construction i.e.in the early 1900's

More typical these days is to have a strata titled property even if it is just 2 houses on one block.

However we have heard of less than scrupulous developers and builders who when told by councils that they could not strata a property due to its smaller than allowable land sizes, have instead built for example two houses on the property and then registered the land in a company name issuing two shares. They then claim that this is company title.

This is very different from company title as both share holders own effectively a 50% portion of the total property. Not an individual defined unit within the building.

As a result the lender cannot use the property as security for a loan and therefore it is not possible to borrow against it.

Hope this helps

Regards

Awesome Albert

Hi Ash,

In relation to company title properties, you're restricted in the amount of lenders that will finance those types of properties and max LVR is usually only 80%.

As such, if you've got a 40% deposit, you should be fine.

Only thing to consider is if you plan to sell the property one day. Many people in Sydney need their LVR >80% to secure the property so if you decide to sell you'll be restricted to dealing with only buyers who have a +20% deposit.

Kind regards,

Tim Russell
Multipart Finance
0400 530 868
tim@multipartfinance.com.au