Because so many people are now interested in SMSF loans for their retirement planning, we’re happy to provide information about SMSF loans. Before we detail the “8 Facts” please know you can contact one of our SMSF loan specialists at any time for additional information.
Fortunately, it’s become much easier to get an SMSF loan. However, it’s important to understand that SMSF loans are different from other loans. The SMSF loan is a specialised product.
Here’s what you need to know to get started…
1. Great news for investors—interest rates are more competitive. To get the lowest rates, it helps to have someone on your side who is constantly monitoring the rates. Interest rates for SMSF loans are typically close to standard variable—rather than the discounted rates available to a personal investment property loan.
2. The SMSF loan is a highly specialised loan so be patient and have a specialist on your side. A bank credit officer with specialised training will review your loan and this may take longer than a ‘normal’ review. The loan officer may have questions that a specialist in SMSF loans needs to answer.
3. Understand your obligations before you commit. Lenders want to ensure that investors fully understand their obligations before entering into an SMSF loan. Remember…this loan is complex so it’s important to have a specialist explain precisely how your loan will work.
4. Line of credit and redraw are not options for SMSF loans. However, a specialist can still help you structure the loan to help you achieve your long-term objectives…with maximum flexibility.
5. You must have an SMSF structure in place before property contracts are created then signed. You’ll need an ABN number; this can take up to 28 days. If you’re moving your existing superannuation from a retail or industry fund, a rollover may take up to one month. Once the rollover is complete, funds will be available for the deposit. Again, the SMSF loan specialist can help with the details.
6. You will need a bare (security) trust in place so you meet your legal obligations and meet the requirements of the bank. You will need a bare trust for each property you acquire.
7. There’s a TON of documentation and it must be professionally prepared. The SMSF loan is a complex instrument with multiple parties. Bank staff are only human. An experienced SMSF mortgage broker will check the documentation before settlement or exchange to ensure the transaction is legally watertight.
8. It’s VITAL to have a specialist on your side to you get the best rate…and make sure you’re legally compliant.
Yes—the SMSF loan is complex. However, using your SMSF to acquire property can help you achieve your financial and retirement goals.
If you have questions about SMSF loans go here or call 1300 886 149. You can speak directly with an SMSF specialist…with no obligation.
P.S. Even if you’re not ready to move forward immediately with an SMSF loan, it’s valuable to speak with a specialist. We’ll answer your questions and let you know how the SMSF loan can boost your retirement.