I have finally identified all of our super funds and consolidated into one fund for each of us – a combined total of $100k.
I have been advised that (St George?) is lending upto 72% for SMSF.
I am of the understanding that it initially costs approx $3k to set up your SMSF.
So am wondering if it is worthwhile to do atm or wait until I have the recommended amount of $130k+?
hi Maree,
Do you have access to equity in other property such as your home or other investment property that is not fully leveraged?
You may save on fees / hassles by using the BYOB concept (be your own bank). This will require the same Bare Trust set up for the non-recourse loan within a SMSF but you provide th funds via an arms length loan to the SMSF.
Some web information with all the usual disclaimers can be found at EvolveMySuper "SMSF limited recourse borrowings from related parties" and TheDunnThing Video Blog – Understanding SMSF Limited Recourse Borrowing Arrangements
I am exploring the same concept but have opted for another strategy short term.
TassieJH
I was approached by Investec bank /Experien doing 90%LVR on the SMSF last month
I think it is doable to buy property with 100kThanks Tassie – we purchased our PPOR last year by using money from our IP and had to get mortgage insurance. Our PPOR has increased by $60k in this time but not keen to mess around with anything there at the moment.
Thanks god_of_money will look at those lenders
god_of_money I checked out their website it has the following on SMSF:
- Borrow up to 90% when guaranteed by yourself and the trustee, and secured against the property
- Borrow up to 65% when guaranteed by the trustee and secured against the property
maree_bradross wrote:god_of_money I checked out their website it has the following on SMSF:- Borrow up to 90% when guaranteed by yourself and the trustee, and secured against the property
- Borrow up to 65% when guaranteed by the trustee and secured against the property
You need to be either a doctor/dentist or accountant as Experien only provide facilities to people in the medical or accounting professions.
Max borrowing for residential property in SMSF is currently 80% but not all lenders go this high.
Thanks for the feedback Mike – which bank offers 80% for SMSF?
Liberty Finance for one.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Westpac & CBA being the others
Thanks Richard & Mike
Richard/Mike.
Pro's/cons of those three lenders products, versus the Rock and St George?
euro73 wrote:Richard/Mike.Pro's/cons of those three lenders products, versus the Rock and St George?
Too many to list here in detail and depends on your individual situation but here are a few;
Minimum net SMSF Asset Position – CBA require minimum $300,000
Variable Interest rates – vary 7.67% to 8.59%
Monthly/ongoing fees – from $8pm to $93pm
LVR’s 65% to 80%
Minimum Loan Amounts – $10,000 to $250,000
Bank application/legal costs range – $2,200 to $3,200
Will lend to individual trustees – Not at 80% LVRMikeF wrote:euro73 wrote:Richard/Mike.Pro's/cons of those three lenders products, versus the Rock and St George?
Too many to list here in detail and depends on your individual situation but here are a few; Minimum net SMSF Asset Position – CBA require minimum $300,000 Variable Interest rates – vary 7.67% to 8.59% Monthly/ongoing fees – from $8pm to $93pm LVR's 65% to 80% Minimum Loan Amounts – $10,000 to $250,000 Bank application/legal costs range – $2,200 to $3,200 Will lend to individual trustees – Not at 80% LVR
So the Rock and St George are amongst the better SMSF loan products then?
euro73 wrote:So the Rock and St George are amongst the better SMSF loan products then?If LVR is not an issue my preference would be St George or NAB
OK. My understanding was that the Rock has 70% LVR, no Personal Guarantee and more generous borrowing capacity than both St G and NAB…. and an app fee of $600. That would seem to make it a very good product in a side by side comparison. Is that not the case?
euro73 wrote:OK. My understanding was that the Rock has 70% LVR, no Personal Guarantee and more generous borrowing capacity than both St G and NAB…. and an app fee of $600. That would seem to make it a very good product in a side by side comparison. Is that not the case?The Rock servicing seems to be more generous (80% of all rental income & 100% of all historical contributions less tax 15%) and yes they have no PG's however I think LVR is still only 65%. Their variable rate is slightly higher than NAB or St George and not sure if they take into account future additional (salary sacrifice) contributions (above the usual 9%) unless you can show them over the past two years.
On fees you also need to take into account the lenders legal fees in addition to the app fee. When you do this the rock is $2450- compared to St George $2142-
For my money the dragon is still slightly ahead although I agree that their servicing calc may not suit everyone.
Sorry ……….I stand corrected on The Rocks LVR its now 70%
Thats good information Mike- thanks.
Seems as though The Rock has a pretty competitive product. In the scheme of things, $300 or so in set up costs is pretty inconsequential, if they have superior borrowing capacity. Correct me if Im wrong, but I believe St G is priced at 7.80% and The Rock is at 7.89%? Not much in that, either…
euro73 wrote:Thats good information Mike- thanks.Seems as though The Rock has a pretty competitive product. In the scheme of things, $300 or so in set up costs is pretty inconsequential, if they have superior borrowing capacity. Correct me if Im wrong, but I believe St G is priced at 7.80% and The Rock is at 7.89%? Not much in that, either…
Euro
Yes The Rock is competitive & rates you quoted are correct but not your set up costs of $300? More like $5K+
Estimated costs would be;
App fee $600
Legals $1850
Independent Legal Advice ?
Independent Financial ?
Mtg Stamp Duty ?
Set up security custodian $500 (Minimum)
Bare Trust documentation ?sorry Mike, I meant a difference of $300 between St G and the Rock…. $2450 v $2142
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