Is a Purple Title Acceptable to My Mortgage Provider?
A purple title, also known as a strata title, is an uncommon type of mortgage title that was developed because of an increase in multilevel residential properties after World WarⅡ. The ownership of these properties was transferred to third-party companies with rules developed that allow the holders in the third-party company’s shares to inhabit specific building areas.
Purple titles allow you to own shares rather than specific land titles and have evolved into strata titles over the years. Strata titles are relatively standard and purple titles are generally limited to various retirement communities.
Unfortunately, a purple title most likely will not be acceptable to your mortgage provider because they are known to be challenging to manage. Some providers may accept purple titles, but this largely depends on the individual provider and their rules and regulations. Purple titles are complicated when used as security for a loan because your mortgage provider will take over the lot in question and receive some company shares.
Purple titles used as security can negatively impact your provider when they take over your lot due to all of the owners voting when insurance concerns, maintenance issues, and various expenses arise as well as negatively affect your property’s value.
In the case that your mortgage provider does accept your purple title as security, your provider will determine how much you are eligible to borrow. However, for an idea of borrowing limits with purple titles, take a look at the following: