Specialist lender Thinktank has launched a new SMSF product focused on commercial lending and this product is now available to all Self Managed Superannuation Fund clients of Ocean Home Loans.
Some of the key benefits of the Think Tank commercial Self Managed Superannuation Fund Lending product are:
With a 75% LVR potential, it reduces the level of cash contribution required to complete a property purchase. This higher LVR can facilitate your purchasing a property at a higher value than you would have previously.
With the 25 year loan term it significantly reduces the level of amortisation in comparison to other funders in the market. This reduced amortisation (effectively 4% of the loan limit per annum, on a straight line assessment) allows you to manage the Self Managed Superannuation Fund as follows:
Aids the SMSF to rebuild its cash war chest
The Super fund can rebuild its cash component for either diversification into other assets (i.e. managed funds), and reduce reliance of the Self Managed Superannuation Fund to property alone. This is a prudent activity for risk management within any Super fund.
Member contributions can potentially reduce, as they may not be required to meet other lenders more constrictive amortisation schedules.
The longer amortisation strategy can facilitate re-building the cash reserve in the SMSF to allow you to acquire another property asset within the Self Managed Superannuation Fund.
As the lender Thinktank commits to the full 25 year loan term at outset of the facility, the client is not subject to risks/issues that may arise with property re-valuations and potential breaches of the LVR due to market factors/variables for their property portfolio.
With the current low interest rate environment, market based lease payments back to the fund can see the loan paid off in 10-12 years with surplus income adding to tax effective retirement savings.
In short, it allows the SMSF to “run” as it should, with cash applied to various options on the basis of either the funds member preferences and/or direction from their respective financial advisor.
Warning: The content of this page provides General Advice about Self Managed Superannuation Fund lending products, SMSF commercial loans, lender requirements and our service. It does not take into consideration your specific personal or financial circumstances, needs and objectives and is not a specific recommendation. We recommend that you seek independent financial advice before borrowing money to invest via your SMSF.