Mortgage Broker in Sydney: Ultimate Guide to Refinance and SMSF Loans
Saving your money to secure your retirement is one of the significant milestones. This usually means having enough funds in your bank account. But retirement is more about securing a home or relying on a rental income, which essentially makes you apply for a home loan.
If you are considering a mortgage broker in Sydney, you must understand everything about refinancing and self-managed superannuation funds. Because it is highly likely to doubt your current mortgage or not have the best investment strategy for your retirement years. And to increase your future savings, you must realise these key terms.
In this blog, you will understand everything about refinancing and self-control superannuation loans, including when to choose these options, checklist of documents, and steps to apply for these loans with the help of a broker. So, continue reading it till the end.
Overview of Refinance and Self-Managed Superannuation Funds
What is Refinancing?
It is possible to pay home loan instalments but find the current interest rates and loan terms to be too high as per the current market standards. In such a situation, lowering your home loan rate becomes the right strategy. Also, if your financial situation is improving, slashing off some years to pay the loan early is a good plan of action.
The process of changing your current mortgage to a better structure is refinancing. While your lender might impose some limitations, having a mortgage broker in Sydney makes it an easy process.
What is a Self-Managed Superannuation Fund?
If you are receiving a superannuation contribution from your employer, your money remains safe in a separate fund for a retirement living. However, there are times when you are willing to invest your money in the right way instead of just using them.
Interestingly, super funds make you eligible for a self-managed superannuation fund loan for investing into property, shares, cryptocurrencies, and other assets.
However, this strategy works well for people who have a substantial balance of around $2,00,000 to get the SMSF loan approval. This should cover retirement daily needs, loan repayments, and costs.
You need to set up an SMSF (Self-managed Superannuation Fund) savings account and apply for the loan to have full control over where to invest. A mortgage broker in Sydney helps in applying for the loan application through required compliance and available lenders.
When to Consider Both?
Now, let’s move on to understand when to consider both refinance and self-managed superannuation fund loan.
1. If You Have Clear Financial Goals:
While both serve different purposes, the financial goal behind refinancing and investing in real estate is to have enough money for retirement. If your financial condition is improving, you must consider refinance before the lock-in period ends.
In contrast, if you have substantial funds in your superannuation funds for capital gains, then SMSF loan is worthwhile.
2. When You Want to Use Refinance Savings for SMSF:
If your goal is to maximise the cash flow, refinance your mortgage to a lower monthly installments. This eventually lets you contribute voluntarily more to SMSF savings. A mortgage broker in Sydney guides you through the financial advice.
3. If You Are SMSF Property Comply With ATO:
ATO, stands for Australian Tax Office, is a set of rules which define that the purchased property must be used for retirement benefits. Also, the property must not be used for residing or renting to a fund member.
Documents to Prepare for the First Meeting
Here are some documents you must have to refinance and consider SMSF setup with a broker.
Documents for Refinancing Mortgage:
Mortgage statements.
Income verification.
Credit reports.
Documents for SMSF Setup:
Current superannuation details.
Investment preferences.
Legal and compliance documents.
Consider Broker Recommendations
Once you are clear of all the legal and financial requirements, it’s time to analyse broker’s recommendations.
1. Analyse Refinance Options:
A mortgage broker in Sydney works with both the reputable and private lenders who work through a broker. When working with one, you must analyse loan interest rates and terms from their recommended lenders. Remember that shorter loan terms contain higher installments but lower interest costs and vice versa.
2. Review SMSF Investment Strategies:
When working with an SMSF broker, review various investment options. Consider if you can invest in larger assets like residential or commercial property, shares, or bonds to build a better portfolio. Also, estimate the return on investment and potential risks for each investment.
Steps to Apply for Refinance and SMSF Loan
Here are a few strategies to apply for a refinancing option self-managing superannuation fund loan.
Steps of Refinancing:
1. Complete the Refinance Process:
Review and sign the necessary refinance documents with the help of a mortgage broker in Sydney. Ensure you have a complete knowledge of the terms and conditions before applying for the new loan structure.
2. Inform your Current Lender:
Contact your current lender about your refinancing decision, confirm the final payments, closing costs, and due date for the existing mortgage. Coordinate with your refinance broker to ensure a smooth transition.
3. Monitor the New Mortgage Setup:
It is best to set up automatic payments for your new mortgage. This way you don’t have to memorise payment dates and you can even avoid late fees. Also, consistently review your mortgage statements to verify if the installments are correct and on time.
Steps to Set Up Your SMSF Account:
1. Establish the Trust and Trust Deed:
Consult with an SMSF mortgage broker in Sydney to keep you in touch with a legal advisor for drafting the trust deed. Be clear about the superannuation legal laws and look if the deed contains all the laws. Also, set up a trust account. Lastly, have every member in SMSF sign the deed.
2. Open a Bank Account for the SMSF:
Choose a bank offering an SMSF account meeting your fund’s needs. Ensure that the account is used exclusively for SMSF activities to maintain compliance.
Final Words
We hope you enjoyed reading this blog. As you see, refinancing and self-managed superannuation fund loans are two most popular retirement savings, keeping away the traditional pension benefits.
Remember, to have a dedicated, well-experienced, and compliant mortgage broker in Sydney. Choose Axton for simplifying the process.
