Understanding the different lending options for buying a property with super fund can be difficult and incredibly complex, especially if you intend on using your fund balance as the deposit. That doesn’t mean it can’t be done; you just need to get the right advice and access the finance option that’s right for you.
To help you navigate the pitfalls, we recommend engaging the help of the professionals at Corbwood & Associates. We can walk you through the process of residential and commercial investing through your SMSF.
Can I Buy Property Through Any Super Fund?
First things first, you need to ensure your super fund allows you to invest in property. Currently, only self-managed super funds can be used to invest in property.
The primary purpose of any superannuation fund is to grow your contributions through investments.
The idea behind an SMSF is that you have control over how those funds are invested. Rather than invest in stocks or bonds, you can choose to invest in residential or commercial property.
Self Managed Super Fund Property Loan
You are not required to have the full value of the property when buying an SMSF investment property. There are lending options for buying a property with your super whereby you can apply for finance for the residual balance. However, most lenders will require your SMSF to have at least 30 percent of the value of the property as a deposit.
These types of loans are known as limited recourse borrowing arrangements (LRBA) and are incredibly complex to set up with strict rules applied. This is where highly experienced financial services provider Corbwood and Associates can help.
LRBA loans are designed to limit the actions of the lender should the repayments on the loan not be met. In short, an LRBA protects your other assets linked to your SMSF from being seized. To achieve this, a separate trust and trustee, known as a custodian, is set up.
Which Lenders Offer LRBA Loans?
Due to the small profit margins and complications involved with LRBA loans, not all banks or lenders offer them. Those that do often levy high-interest rates, and the market is constantly shifting with regards to who will offer these loans.
Engaging the help of Corbwood and Associates means your lending options for buying a property with your super are carefully scrutinised and chosen competitively.
Corbwood & Associates, We Streamline Investing With Super
Avoid unnecessary stress and delays in investing – trust us to secure your SMSF investment finance at a competitive rate. Keeping you compliant and your financial future secure is our speciality.
At Corbwood and Associates, our team is made up of fully qualified and licensed professionals who understand your needs.
We are passionate about providing quality advisory services for:
- Property investment via self-managed super funds.
- Refinancing and first time home loans.
- Property investment advice and wealth creation strategies.
Contact us to arrange a consultation and learn how we can help secure your financial future.
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