SMSF Home Loans

Buying property in your Self Managed Super Fund with an SMSF home loan can be a great way to leverage off your super balance to access growth on an asset much greater in value than the balance of the fund itself. While the yield from a residential property is often considered lower than that of other investment options (i.e., shares), an SMSF Property Loan can unlock access to growth and returns against a property up to 5 times the value of their initial investment (deposit). Since SMSF lending is assessed in isolation to the owner’s personal financial position, an SMSF can offer a great solution to borrowers who may be ‘tapped out’ for lending and repayments in their personal names, but still want to borrow money and grow their property investment portfolio.

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Our SMSF Home Loan Promise

SMSF Property Loans can often sound rather complex for new players, however they are generally simpler than they sound. Once you gain a good understanding of the ownership and lending structure, the rest is quite basic, and since SMSF Property Loans fall outside of the NCCP (National Consumer Credi Protection act), they’re generally quite simple to get approved. Despite the benefits of SMSFs, and the simplicity of the approval process for SMSF Property Loans, most brokers don’t know a lot about them. Our team of SMSF specialists is here to guide you through the tricky stuff and to keep the process simple.

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Sunshine Coast Brokers That Care About Your Financial Success

Plenty of Sunshine Coast locals are quite active with their property wealth creation initiatives, but most investors tend to stick to one or maybe 2 investment properties at a time and tend to hold these properties in their personal names only. Maybe this is because they haven’t considered another way? Maybe it’s because they haven’t got the right team of professionals in finance, planning, and accounting to help them structure their lending and investments, to reduce Tax, and to maximise borrowing capacity for future property purchases. It’s important to us that you have the right professionals in your corner to help see into the future and recommend future-proof ownership and lending structures today. Don’t worry, if you’re not sure where to start, we’ll step you through it all and put you in touch with the right professionals to make sure you get it right and to continue working with you as your financial needs evolve.

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Documents To Provide To Lender

When applying for a SMSF Home Loan amount, we’ll need you to prepare the following documents:

  • Personal Identification: All associated individuals can be identified using 100 points of personal ID.
  • Identification of corporate entities, trusts, and self-managed funds: All entities in your SMSF structure will also need to be identified. This could be by way of ASIC certificates, certified Trust Deeds and Fund statements.
  • Liquid balance of Self-Managed Fund: ‘Liquid Balance’ refers to the cash available in your Super fund to use as deposit and complete the transaction. A statement of your Self-Managed Super account will be sufficient to show this.
  • Contract of Sale: Like any property purchase, you will need to sign a contract of sale. Check in with us first to make sure that the contract has been drawn up with the correct entity as the buyer and that the right associated persons are signing on behalf.
  • Statement of advice: Most lenders will require you to provide a ‘Statement of Advice’ from your Accountant or Financial Planner to make sure that your SMSF property purchase aligns with your strategy. This is generally something you can provide before settlement.

Don’t worry, if you don’t have one or more of the above items already, we’ll talk you through all of this and Liaise directly with your accountant and Financial Advisor to collect any missing pieces.

The Mortgage Broking Process for Invoice Finance

Getting a home loan isn’t always a walk in the park—it can be a bit of a process, but if you team up with one of our mortgage brokers, we’ll have your back every step of the way, making sure you’re on the right track from the get-go.

  • Speak with an SMSF specialist mortgage broker: Before you engage in negotiations to purchase a property under SMSF, it’s important to speak with an SMSF specialist mortgage broker to make sure you have correct entities and super structures in place, and to conduct a preliminary assessment on your expected lending. We’ll also want to ensure that you don’t outlay any cost associated with setting up these SMSF structures if lending appetite doesn’t align with your property goals.
  • Set up your SMSF (If you haven’t already): If you haven’t set up an SMSF already, you’ll need to work with your financial planner and accountant to get this in place. A typical SMSF property structure usually consists of a ‘Bare Trust’ with a ‘Corporate Trustee’ at least one director, and, of course, the Super Fund itself. You’ll need to seek advice from a Financial Planner to make sure the structure aligns with the financial plans and position of all associated persons, and your accountant will be able to set it all up.
  • Find a property and sign a contract: Once you’ve agreed on your price, terms, and conditions, it’s time to put pen to paper. Make sure you check in with your accountant, planner and mortgage broker before you sign, to ensure that you purchase under the right entity and that all associated persons are signatories to your purchase. Your Mortgage Broker will also check that the property meets acceptable security guidelines among the lenders who offer SMSF lending.
  • Seek Unconditional approval: Once you’ve locked in a property, it’s time to apply for unconditional approval. Your mortgage broker will make a recommendation on the most suitable lender based on your purchase price, the security type and location, interest rates and fees, loan size, and other requirements like post settlement liquidity.
  • Settlement: Once your loan contracts have been signed, we’ll liaise you’re your solicitor and the lender to make sure all parties are ready to complete the transaction on your contracted settlement date.

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SMSF Home Loans Support

  • Most finance brokers have access to lenders who offer SMSF loans and will dabble with the odd Super transaction from time to time, but it’s generally a lack of experience in this space that gives SMSF lending its reputation for complexity and difficulty. SMSF lending is actually quite simple, providing you know what you’re doing. Our team of SMSF finance specialists do this every day and are here to guide you through the process and make sure you get it right.
  • We’ll work with your Accountant, Financial Planner, and Conveyancer to make sure you have the right SMSF structure and that it aligns with the purchase contract and loan documentation perfectly. Don’t worry, if you haven’t engaged with one of these professional services, we’ll put you in touch with someone who also specialises in SMSF.
  • Since many banks have pulled out of the SMSF space, the options for direct finance are very limited. Fortunately, there are plenty of non-bank lenders now days who specialise in SMSF, but many are only available thought the mortgage broking channel. We’ve got the Majors and the Non-bank lenders covered, and we’ll make sure your loan goes to the right financial institution to get the deal done at the lowest possible rate.
  • Your wealth creation strategy in SMSF often needs to be quite different from the strategy you adopt outside of Super. Limitations accessing the equity you have in properties held in your super, ongoing SMSF management costs, lending guidelines, and Tax, for example, can affect the duration you hold on to a property, which property you buy, and how much you wish to contribute as a deposit.
  • Whether this is your first Rodeo in the SMSF world or you’re a seasoned veteran, we’ll take the time to make sure you understand your SMSF and that you’re equipped with the knowledge you need to manage your investments and make educated decisions on your financial future. SMSF is not a ’Set and forget’ solution to wealth creation and we’ll be right here with you, now, and long into the future.

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How Can SMSF Loans Help Your Financial Growth?

For most people, Superannuation is something that their employers will contribute to for their working life, until such time that they are able to retire and access their funds. In the meantime, their Superannuation Fund will invest their capital across a wide range of Shares, Bonds, Property, Currency, and other investments, depending on the risk profile you’ve opted for in your Fund. Generally, you have limited control over where your funds are invested, and the fund will manage it for you. An SMSF, on the other hand, allows you to have full control over where your funds are invested, which gives you the ability to jump on opportunities as they arise. Buying property under your SMSF allows you to leverage off the capital in your fund to invest in an asset worth much more than the balance of the fund itself. For example, yield and growth at 5% of a $600,000 property is a lot more than 10% yield and growth on just a $200,000 deposit that you might otherwise invest without leverage from the banks.

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Why Work With A Broker When Securing SMSF Home Loans?

Many major banks have removed their SMSF offering from the market to focus on other lines of business. Fortunately, there are plenty of Non-bank lenders that focus entirely on this market and deliver their products through mortgage brokers. As an SMSF specialist mortgage brokerage, we’ve made sure that we are accredited with a wide range of SMSF lending sources, so that our clients have access to the best lending products possible.

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Real Customer Reviews

Instead of talking our home loan finance brokerage up, please read our customer reviews. This is a direct feed from our public Google Business Reviews, so you know they’re 100% genuine.

Mellissa Lambert
17/1/2024

We’ve used the expertise of Luke, Shayna and the Loanright team on two separate occasions now, I must say their service is second to none and they get the job done In record time. No question was too silly, they always have time for us. Would use again and recommend in a heart beat to anyone else needing brokerage assistance. Many thanks.

Rachel Clifford
2/1/2024

The team at Loanright did an amazing job helping us work out our plan to purchase a property all the way through to making our loan happen. They are reliable, friendly, approachable, very informative and supportive and worked really hard to make things happen for us. So grateful for their help. Would recommend them to anyone.

Meghan Baker
15/12/2023

Shayna and Luke have been so helpful in helping us to secure our first home loan. Shayna took her time in answering my many many questions and guided us through the process. Would happily recommend the Loan Right team to anyone.

Michael Cross
1/12/2023

Luke and the team at Loanright are absolutely awesome. We couldn’t be more happy with the service we received throughout the whole process of purchasing an investment property. The team make it such an easy event whilst being very professional. Thanks guys

Shannon Blennerhassett
22/10/2023

Luke, Shayna and Deb as such a professional team. We never had any questions left unanswered and were always updated. We had circumstances change several times but nothing was to much for them to give us new information. Will definitely use them again.

Bethany Taylor
4/8/2023

Luke and his team are amazing. They helped me through a particularly tricky application process and managed to secure me an incredible result, and I couldn’t be happier. Big thank you to Deb and Shayna as well. Highly recommend these guys!

Jacinta King
26/7/2023

Have used Loanright for a few years now. They have been able to get us loans in difficult circumstances including being directors of company’s which is notoriously harder to get. So grateful for all the advice from Luke and his team.

FAQ’s About SMSF Home Loans

How does an SMSF work?

As the name suggests, a Self-Managed Super fund is just that. Instead of relying on a Professional Fund manager to control your risk and return, you manage your investments as you see fit. Typically you’ll need to crate a Trust and assign a Trustee, which could either be an individual or a corporate trustee with one or more directors. If you intend to buy property in your SMSF you’ll also need to set up a Bare Trust (This becomes the owner of the property until the loan is paid out) and assign a Corporate or Personal Trustee. Your employer can contribute to your SMSF and you can also make voluntary contributions.

How much does it cost to set up an SMSF?

Your set up costs will depend on the complexity of your SMSF structure. The more parties and entities involved, the more it will cost to set up. Your accountant should be able to give you a good idea of what to expect based on your own needs and situation. You’ll also need to consider ongoing accounting and auditing costs and these should be factored in when considering if SMSF is the right strategy for you.

Can build under my SMSF?

Typically, you cannot build under an SMSF, however you can buy a new home ‘Off the plan’ that is to be built by someone else, and in many cases, you can invest in renovations to an existing property already owned under your SMSF.

Can I pay my loan off early?

Yes. Loan terms under SMSF are typically structured as P&I over 30 years. You can make additional contributions to reduce the interest on your loan and you can pay the loan out early with no exit costs. Be mindful though that if you intend to make lump sum deposits to reduce your loan balance, you may not be able to re-draw these as can typically be done under a standard home loan in your own name.

How much do I need in my Super to buy a property?

This depends largely on the value of the property you intend to buy, as well as the LVR and post-settlement liquidity requirements for the lender you use. However, consider that your setup costs and ongoing audit and accounting costs will need to be factored into your long-term strategy. In many cases, expected returns on properties at the lower end of the entry level market might not justify the upfront and ongoing costs. We can give you some guidance in this space, but this is something you’ll need to workshop with your Accountant and/or Financial Planner.

Can I sue equity held in an existing SMSF property to buy another one?

No. Typically, the only way to access equity held in an existing property owned by your SMSF is to sell the property, pay out the associated loan, and re-invest with the proceeds of sale.

What exactly is an SMSF home loan?

An SMSF home loan is an Australian mortgage that leverages your self-managed super fund (SMSF). You borrow against the fund you have to invest in Australian residential or commercial property.

How does an SMSF work?

As the name suggests, a Self-Managed Super fund is just that. Instead of relying on a Professional Fund manager to control your risk and return, you manage your investments as you see fit. Typically, you’ll need to create a Trust and assign a Trustee, which could either be an individual or a corporate trustee with one or more directors. If you intend to buy property in your SMSF you’ll also need to set up a Bare Trust (This becomes the owner of the property until the loan is paid out) and assign a Corporate or Personal Trustee. Your employer can contribute to your SMSF and you can also make voluntary contributions.

How much does it cost to set up an SMSF?

Your set-up costs will depend on the complexity of your SMSF structure. The more parties and entities involved, the more it will cost to set up. Your accountant should be able to give you a good idea of what to expect based on your own needs and situation. You’ll also need to consider ongoing accounting and auditing costs and these should be factored in when considering if SMSF is the right strategy for you.

Can build under my SMSF?

Typically, you cannot build under an SMSF, however you can buy a new home ‘Off the plan’ that is to be built by someone else, and in many cases, you can invest in renovations to an existing property already owned under your SMSF.

Can I pay my loan off early?

Yes. Loan terms under SMSF are typically structured as P&I over 30 years. You can make additional contributions to reduce the interest on your loan and you can pay the loan out early with no exit costs. Be mindful though that if you intend to make lump sum deposits to reduce your loan balance, you may not be able to re-draw these as can typically be done under a standard home loan in your own name.

How much do I need in my Super to buy a property?

This depends largely on the value of the property you intend to buy, as well as the LVR and post-settlement liquidity requirements for the lender you use. However, consider that your setup costs and ongoing audit and accounting costs will need to be factored into your long-term strategy. In many cases, expected returns on properties at the lower end of the entry level market might not justify the upfront and ongoing costs. We can give you some guidance in this space, but this is something you’ll need to workshop with your accountant and/or Financial Planner.

Can I sue equity held in an existing SMSF property to buy another one?

No. Typically, the only way to access equity held in an existing property owned by your SMSF is to sell the property, pay out the associated loan, and re-invest with the proceeds of sale.

Request A Special Home Loan Deal

If you’d like more information about the right home loan options, or the home loan process as a health worker, without having to commit your time to a lengthy loan application, please reach out. We can book a confidential conversation, understand your financial goals, and then negotiate the best rates with lenders helping doctors and the medical profession without your prior commitment.

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