Investing in property through your superannuation
Did you know that you are allowed to purchase property through your superannuation?
You can now be in complete control of your superannuation and choose how and what your super is invested in. Part of this is the ability to invest in residential or commercial property through a self-managed super fund (SMSF).
This process works similar to purchasing in your own name where you choose the property you wish to purchase, your superannuation funds are used for your deposit, and a loan is provided from a lending institution to complete the purchase. Rent received from your property and employer super contributions assist with your super fund in making the required loan repayments.
Purchasing property through your superannuation can be a way of increasing your property portfolio, without having the potential cash flow or equity restraints you might have if you were to purchase in your own name.
Specialist advice is required when considering purchasing through your superannuation fund.
Purchasing property with a low deposit
A low deposit does not necessarily mean you will not have a home loan approved. Options to enter into the property market with the help and support of a family guarantee are available for borrowers who have a low deposit, .
Direct family members can assist you with a guarantee, meaning they are providing a small amount of their property equity to assist you with purchasing your home. It is important to note that the family member offering the guarantee must have a property themselves, that either has a loan to another bank or is owned outright.
A family guarantee will also save you in having to pay costly lenders mortgage insurance premiums. Lenders charge a mortgage insurance premium when the borrower has less than a 20-per-cent deposit, this premium is paid to the lender and can add up to thousands of dollars. It is getting harder for borrowers to save such a large deposit but the family guarantee forfeits the need to pay high mortgage insurance premiums, and the requirement of the borrower to demonstrate their savings history to the lender.
Talk to Mulcahy & Co’s lending team to find out if this can work for you. Our range of lending services will help you obtain the mortgage package or other loan or finance you are looking for. Check out our
lending FAQs
for more information.
