SMSF loans difficult to write, just a myth

Speaking to The Adviser, RESIMAC’s chief operating officer Allan Savins said one of the most commonly held beliefs about SMSF loans is that they are “difficult to write” and “overly complicated”.

However, while Mr Savins said these loans do differ from the 'stock standard' residential property loan, brokers should not find SMSF loans overly complicated so long as they have an understanding of the basics.

“It is certainly true that there is more to consider and to be aware of with an SMSF loan compared to an ordinary home loan,” he said.

“That said, there is a lot of help, support and training available. Brokers are quite capable of handling these loans if they put in the time to learn the basics. The most complicated part of the process can actually be taken care of by the lender’s panel lawyers.”

Mr Savins' comments were echoed by Liberty Financial’s general manager for commercial finance, Suresh Pillai, who likens writing SMSF products to “riding a bike”.

“It’s a lot like writing an investor loan and a bit like riding a bike,” he told The Adviser.

“Clients may not be aware of the ability to acquire property via an SMSF and brokers can play an important role in providing relevant product background information. That said, brokers need to exercise caution to ensure that, unless appropriately qualified, they avoid providing financial advice. Once you’ve done one or two you won’t look back.”