Already a subscriber?Question: I would like to know a little more about SMSFs when it comes to loans to buy property, as my wife and I would like to buy our own house in a few years, and we are worried that if we had property in superannuation, we may not have the borrowing capacity for our personal property.
In the case of a personal home loan, your capital is your savings outside super. Your debt, income, savings and spending habits will be assessed by your lender. The deposit requirement is typically 10 to 20 per cent for interest rates of 6 to 6.5 per cent. There are two ways how having an SMSF with an LRBA might affect your personal borrowing capacity outside super, Scully says.Because of the special limited recourse feature, it has become standard practice for SMSF lenders to seek personal guarantees from fund members for the loan.
Some banks are happy to ignore LRBAs; others will take them into account only if they appear on a borrower’s credit file, which is a report showing the borrowing history and repayment record.If an LRBA is taken into account, the SMSF loan guarantee will have the same effect as if the borrower had taken out that loan in their own name, Scully says.