A self-managed super fund buying property is a private type of superannuation fund that you can easily manage by yourself. It is managed by the Australian Tax Office. There are four members allowed in a single fund program, and they will be trustees to each other. All of them are responsible for making the decisions that are concerned with the fund and related to the specific legal guidelines. The basic purpose of the self-managed super fund is to secure your future after your retirement.
Things You Need to Know:
Super funds come with the nature of a lot of limitations. That is the reason most lending companies and banks do not give self-managed super funds. Because of these kinds of limitations, loan providers are restricted in case of trust defaults on the repayment commitments. A lot of companies do not offer super fund loan for property investment because of the following reasons.
- The small size of the market
- Trust loans complexity
- Resources of the lenders are limited to itself
Look for lending companies that offer self-managed super funds:
The lender considers the self-managed super funds highly risky because it creates more work and less profit. But it doesn’t mean that all the lenders do not offer self-managed super funds. You can also find a few lenders that offer this type of loan and even give their members discounted residential loans that are taken on behalf of super funds.
You have to talk to a home loan specialist before lending a super residential loan. It is because most of the professionals have the right connections and can help you in the whole process. Even though there are a few companies that are offering self-managed super funds, the process of their application submission can be very tricky, and you need to submit a lot of documents to get the final approval.
You also need a guarantor for self-managed super fund buying property. Some of the lending companies ask for the guarantor from their member of super funds so that the lender can be protected in case of any issue in the future. There are some other companies as well that do not ask for any guarantee that the amount of the taken super loan is equal or less than 60% of the property. It is common with those members that have a high net worth.