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One house with two titles, mortgage problems?

Discussion in 'Property Finance' started by northfan, 9th Mar, 2016.

  1. northfan

    northfan Member

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    Hi all,

    Just saw a property on the market, it is an average house on an average street in an average area in Sydney, nothing really special until I talked to the agent. Basically the house is built on top of two blocks of land so there are two titles. The combined land size/frontage is average when comparing to other properties in the area. The house has been there for decades and the current owner bought it 25 years ago. The land is zoned as R2 low density and its in conservation area, so it is impossible to convert it to a semi or build another house on it.

    I am happy with the location/land size/current house on it. The concerns I have are -

    1. will this two titles thing be considered as a problem when getting mortgage from the big 4 banks? there will be only one name (myself) on the mortgage/titles.

    2. will other buyers considered such properties with two titles a problem to buy? I mean will such properties have limited capital growth compared to other more normal properties? is there any other potential problems?

    3. is it possible to get some paper work done and convert two titles to just one after purchasing the property? will it cost me an arm and leg to do so?

    Basically, can I just treat it as a normal one house one title property?

    many thanks!
     
  2. Gockie

    Gockie I'm an ISTP-A female, so I might be a bit quirky! Premium Member

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    I would generally consider it a good thing to have 2 titles, its a bonus that makes it easy to subdivide. But as you say its heritage conservation, so you pretty much lose the benefit of having 2 titles...
     
  3. northfan

    northfan Member

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    There is nothing you can really benefit from this two titles situation - the house is on both blocks of land, conservation area and zoned R2 low density, so you can't build another house. the owner has already tried to convert it to a semi but that wasn't successful. It is surrounded by many many other average houses, re-zoning won't happen any time soon.
     
  4. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    most lenders will be fine

    Id expect you can have the 2 titles amalgamated for a low cost

    Without knowing the specifics,it smells like a normalish property thats confused :)

    ta
    rolf
     
  5. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    You will have to cross collateralise though :D
     
  6. Corey Batt

    Corey Batt Finance Strategist Business Plus Member

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    Not a major issue, only the most finnicky of lenders will care. Otherwise it'll be treated as a normal transaction, just make sure the broker knows in advance so they can make some quick notes on the file so the valuer/assessor fully understands the deal.
     
  7. albanga

    albanga Well-Known Member

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    How do split titles occur without a subdivison?
     
  8. JacM

    JacM VIC Buyer's Agent Business Member

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    I think it would be problematic if the purchasing entity was a SMSF...
     
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  9. Gockie

    Gockie I'm an ISTP-A female, so I might be a bit quirky! Premium Member

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    Please eludicate....
     
  10. Scott No Mates

    Scott No Mates Well-Known Member

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    Did you get up too early @Gockie ?
     
  11. Gockie

    Gockie I'm an ISTP-A female, so I might be a bit quirky! Premium Member

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    Went to sleep too late. Wednesday night volleyball....
     
  12. JacM

    JacM VIC Buyer's Agent Business Member

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    @Gockie with a SMSF purchase that has a LRBA (loan) you would have one loan one bare trust and one title. I don't think you can have two titles per bare trust and loan.
     
  13. Gockie

    Gockie I'm an ISTP-A female, so I might be a bit quirky! Premium Member

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    Thanks Jacqui. :)
     
  14. AndrewTDP

    AndrewTDP Urban Planning Consultant Business Member

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    Just because it's a heritage conservation area doesn't mean you can't do development on it.

    You just have to be more sympathetic about it.
     
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  15. willair

    willair Well-Known Member Premium Member

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    So many in inner Brisbane like this,some on three titles,but the old queenslander sits on all three,serious money in those properties for those who think outside the box..
     
  16. albanga

    albanga Well-Known Member

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    Thanks but that still doesn't answer my question :p
    How does this occur? What is the reasoning behind it?
     
  17. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Someone buys 2 blocks next to each other to put a bigger house and/or have more backyard.
     
  18. willair

    willair Well-Known Member Premium Member

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    That's ok,i will try and make it more simple,some we control are on 2 titles,they were set that way in the BCC inner zone in the 1940's - 1950's,i just dug one of titles out of the safe,this is an old yellow freehold title on thick yellow paper,all the names of the title holders are on the back,on the front is the block size with the area size and split straight down the middle,my guess is back then people just bought them they way they were set..
     
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  19. albanga

    albanga Well-Known Member

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    Thanks @willair
    I still got to say I don't fully understand why it was ever done like this?
    Are you saying they were separate blocks that people just bought two of and then built houses across the two blocks?

    Edit - Just saw @Terry_w post.
    If that is the case then why could you not develop these lands as serperate houses. I understand zoning has changed but at the end of the day, they are two seperate blocks?
     
  20. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Yes you could I believe. @RPI knows more about this sort of thing.