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Residential and Commercial Mortgages to:
» Terminate the bad Debt on your home loan
» Supercharge your Self-managed Super Fund using Property
» Purchase a NRAS investment property, and
» Use your Superannuation to help you purchase a NRAS investment property
Since 1994 Robert and Jenny have been providing clients with both residential and commercial loan products from Australia's leading banks and non-bank lenders.
For Debt Termination purposes, we offer prominent lenders products provided by our partner FAST.
The following are some of the typical characteristics of an owner occupied or investment loan suitable for Debt Termination available in the market today:
Rental income and negative gearing benefits relied on to assess how much you can afford to borrow -- this means you may be able to borrow more!
Borrow up to 95% of the purchase price (or valuation if lower), more if you hold other property
Up to 30 years interest-only repayments, increasing your potential to tax-deduct the entire repayment for longer
Professional packages with capitalising lines of credit and one low annual fee together with discounted variable and fixed interest rate options
To Supercharge your Self-Managed Super Fund, we offer prominent bank & non-bank products provided by PMM.
The following are some of the typical characteristics of an investment loan suitable for inclusion in a SMSF available in the market today:
Rental income at up to 80% & ongoing 9% super contributions relied on to assess how much your SMSF can afford to borrow & meet servicing obligations
Borrow up to 80% of the purchase price (or valuation if lower) depending on the lender chosen and the balance in your SMSF after deposit and costs have been deducted
Up to 10 years interest only repayments followed by 20 years of principal and interest
Minimum loan amounts starting from $50,000 apply
30 year loans available
How does a lender calculate if your SMSF can afford to purchase a property?
The following is an example of how the CBA determines eligibility: (if your scenario passes this test, it will pass all other banks tests too)
Assumptions
[Minimum loan amount is $256,200 @ 70% of purchase] ~ [Interest rate is 8.15% but they use a 'test rate' loading of 10.15%] ~ [Purchase price of property is $366,000] ~
[Rent per week is $320 and they discount this back to 80%] ~ [Balance of cash remaining in fund is $30,000 & the bank pays an annual interest rate of 4.5%] ~
[Borrowers combined incomes total $100,000]
~ [Funds required from SMSF balance = $109,800]
Calculations they will use:
Loan amount of $256,200 x 10.15% IO = $26,004
Loan amount of $256,200 x 10.15% PI = $27,324 (this is the amount the bank wants to see serviced per annum)
Rent amount of $320 x 80% = $13,312 per annum
Funds left in SMSF of $30,000 x 4.5% = $1,350
Borrowers ongoing SMSF contributions x 9% of $100,000 = $9,000
[$27,324 (loan interest) less $13,312 (incoming rent) plus $1,350 (interest paid to you by bank per annum) plus $9,000 (super contributions)]
$13,312 + $1,350 + $9,000 = $23,662 »This amount needs to be equal to or more than the $27,324 that the bank wants.
From the above example, we can see that the loan wouldn't be approved by the CBA as its $3,662 short in annual income. However, if we use one of their fixed interest rate products eg 3 year of 7.70% then we don't need to add the 2% 'test rate' loading. New loan amount to be serviced is now $21,924 and this is lower than the $23,662 that is available from rent, interest and super contributions and would now be approved by the bank.
Look what happens if you include an income producing ATM into your SMSF
Another option is to include an income producing ATM into your SMSF generating guaranteed 20%+ annual returns before you apply for a property loan. A typical purchase may be a hole-in-the-wall (there are 3 types of ATM's starting at $13,000 + GST) ATM with a purchase price of $37,000 + GST generating a guaranteed minimum monthly amount of $625 or $0.35 per transaction whichever is the greater, from day one and will continue for the next 15 years. Now, lets see what the application looks like when you include an ATM into your SMSF:
Assumptions
[Minimum loan amount is $292,800 @ 80% of purchase] ~ [Interest rate is 8.15% but they use a 'test rate' loading of 10.15%] ~ [Purchase price of property is $366,000] ~
[Rent per week is $320 and they discount this back to 80%] ~ [Balance of cash remaining in fund is $23,400 & the bank pays an annual interest rate of 4.5%] ~
[Borrowers combined incomes total $100,000]
~ [Funds required from SMSF balance = $73,200] ~ [ATM purchase price including gst = $40,700]
Calculations they will use:
Loan amount of $292,800 x 10.15% IO = $29,719
Loan amount of $292,800 x 10.15% PI = $31,224 (this is the amount the bank wants to see serviced per annum)
Rent amount of $320 x 80% = $13,312 per annum
Funds left in SMSF of $23,400 x 4.5% = $1,053
Borrowers ongoing SMSF contributions x 9% pa of $100,000 = $9,000
[$31,224 (loan interest) less $13,312 (incoming rent) plus $1,053 (interest paid to you by bank per annum) plus $9,000 (super contributions) plus $7,500 ATM]
$13,312 + $1,053 + $9,000 + $7,500 = $30,865 »This amount needs to be equal to or more than the $31,224 that the bank wants.
From the above example, we can see that the loan would be borderline-approved by the CBA as its $359 short in annual income. However, if we use one of their fixed interest rate products eg 3 year of 7.70% then we don't need to add the 2% 'test rate' loading. New loan amount to be serviced is now $25,056 and this is lower than the $30,865 that is available from rent, interest, super contributions and ATM earnings and would now be approved by the bank.
Terminate your Debt using these docs from banks and non-bank lenders offering lines of credit
| Westpac | Citibank | Macquarie | Commonwealth |
| Calculators | Calculators | Calculators | Calculator |
| Application pack | Application pack | Application pack | Application pack |
| Advantage package | Mortgage Plus package | Optimum package | Wealth package |
Supercharge your SMSF using these docs from banks and non-bank lenders offering SMSF loan products
| Westpac - min $250k @ 80% | Mortgage Ezy - min $50K @ 70% | Liberty SuperCredit - min $30K @ 80% | Commonwealth - Min $200K @ 80% |
| Application pack | Application pack | Application pack | Application pack |
| Undertaking for legals | Fact pack - ask Robert | Fact pack | Brochure (5mb) |
| Checklist - ask Robert | Checklist | Checklist + SMSF borrowing power |
To Finance your new NRAS investment property, we provide loans from a number of banks and non-bank lenders. Click here for typical lending criteria
Financing your NRAS investment is more difficult than financing a standard investment property. This is because the banks view the long term lease as a potential obstacle to selling the property. The secret to getting approved is to let Robert Kirk prepare the application and secure the approval. He has access to the lending policies of the various banks and is confident in getting your loan approved!
NRAS properties are rented to tenants who meet the NRAS eligibility criteria, and are administered by a Government approved Consortium. (see below)
Most lenders will not accept any form of NRAS property as security for a home loan.
How much can you borrow?
A maximum 90% of the value of the property by some banks and non-banks against the following Approved Participants:
» Yaran Residential Investments Pty Ltd
» Affordable Management Corporation (AMC)
» Questus
» Aspire Housing Group
» Quantum Housing Group
» Urban Affordable Housing Association (UAHA)
» 4 Walls Ltd
» Brisbane Housing Company (BHC)
» Queensland Affordable Housing Consortium (QAHC)
» Urban Affordable Housing Association (UAHA)
Construction lending: Building a new investment property for use under an NRAS scheme is acceptable, as long as the consortium/scheme that is used is accepted by the bank.
Low doc loans are not available for NRAS properties in most circumstances.
In the event the chosen bank doesn't accept the rental amounts provided, the LVR will be reduced from 80% accordingly.
Competitive professional packages and basic home loan discounts are available.
Why are only some consortiums accepted?
Westpac for instance will accept several “non-entity joint venture consortiums” which include Yaran, Affordable Management Corporation (AMC), Aspire, Quantum Housing Group (QHG) & Questus. This lender has investigated the legal structure of these consortiums and has determined that the legal structure that is used by their investors will not impact the bank’s security position.
Using your Superannuation to help you purchase a NRAS investment property
Using Super to provide the deposit and tax environment will primarily benefit the accumulators and pre-retirees (including transition to retirement). With a 10 year benefit of the refundable tax offset (RTO), the strategy would be to maximise the use of the offset and realise the asset post-retirement (exempt from tax). We provide the finance for NRAS properties inside SMSFs with the following key features:
Residential Property |
Commercial Property |
|
Loan Purpose |
Investment Purposes Only / Purchases Only |
|
loan Term |
10 - 30 Years |
5 - 15 Years |
Repayment Type |
P & I or IO up to 5 Years then P & I |
|
Maximum LVR |
70% |
70% |
Minimum Loan Size |
$500,000 |
$150,000 |
Credit History |
Acceptable Credit History or past Credit impairment can be considered |
|
Serviceability Calculator |
Acceptable income includes superannuation contributions and any SMSF income
(rental income is acceptable at 80%) |
|
Security Type |
House, Townhouse or Unit |
Commercial or Residential Real Estate |
How much does it cost, what are the rates, what will you lend against?
Standard loan fees for residential and commercial loans will apply with the following variations:
» Initial Application Fee of $600
» Maximum 10 years interest only then reverts to principal and interest for remaining 20 years
» Servicing Fee of $18 per month applies for the life of the loan
» No annual reviews
» Corporate trustees are required. A Company has a fee of around $880.
» Require 1 year of existing superannuation fund statements where possible. The lender will average out the contributions
» Lump sum contributions are ok
» No Farms & No Serviced Apartments will be accepted as security
» Can't include Government Contributions or Tax Benefits in servicing
» Documentation required to verify income for all SMSF members. Self-employed members without tax returns can be considered. Superannuation contributions by SMSF members for current and previous years will need to be confirmed. Where an SMSF already exists, constituent documents will be required
How to find out more
Further Information:
Platinum Wealth Advisory
Phone: +61 7 3666 0126
Fax: +61 7 3666 0098
Email: info@platinumadvisory.com.au