Self Managed Super Funds are becoming a popular basis for securing a loan. Mr M Grochowski in his latest commentary on trends in the property investment industry quotes new research which shows a majority of brokers have now written a Self Managed Super Fund loan.
According to the latest The Adviser straw poll, 50.2 per cent of brokers have written an SMSF loan, with 10.9 per cent admitting they write these types of loans on a “regular” basis.
Of the 247 respondents, 21.5 per cent said they rarely write these types of loans, while 17.8 per cent admitted to “occasionally” writing these products.
Commenting on the survey, Michael Grochowski says there are significant opportunities for brokers who write SMSF products – something the industry is slowly starting to learn.
SMSFs are becoming increasingly popular as more and more Australians seek to take greater control of the performance of their superannuation funds. Australians are increasingly investing directly in residential property using SMSF loans in order to obtain maximum gearing benefits, says Grochowski.
According to Grochowski, this trend is going to grow in response to the current market volatility in which property, particularly residential property, is seen as a relatively safe investment. In the past SMSF loans were not viewed favourably by many brokers because they were considered too complex to write, says Grochowski, but that view is now changing.
Speaking to investors in his monthly forum, Michael Grochowski says, “The process of obtaining an SMSF loan has become more and more straightforward as lenders have developed the technical and support infrastructure to assist brokers. For example, the more switched-on lenders have designed loans that remove many of the complexities that are involved in establishing an SMSF borrowing structure, and in doing so, they now provide both the customer and the broker with a streamlined experience,” Grochowski said.
Grochowski concluded by saying, ‘Brokers don’t really need to worry if they do not have much knowledge of this type of loan. In many ways if you can write a regular home or commercial loan you can write an SMSF loan, as the lender should be able to provide the necessary support, such as experienced sales and underwriting teams with expertise in this area. The real risk for brokers who have not written an SMSF loan is that they are missing out on a substantial opportunity to add value to their clients.
“We expect to see much more of this highly attractive loan vehicle in the future”, says Grochowski.