NMB has witnessed a spike in SMSF lending interest, though managing director Gerald Foley said brokers need to understand the complexity of these products.
Last year, National Mortgage Brokers held a professional development day on SMSF lending that attracted “the highest number of attendees all year” according to the group.
Foley said the appetite from brokers continued to be strong. “We received great support and enthusiasm from our brokers around the SMSF opportunities. This is certainly a growing market and it would be remiss of brokers to not try to tap into it,” he said.
However, NMB has warned members to ensure they are abreast of SMSF structuring.
“Any loan that is not properly structured at the outset can cause a lender or broker issues down the track. SMSF is no different in this regard,” Foley said.
Foley said the level of independent advice that needs to be obtained from tax and legal advisor is well covered by the processes of panel lenders. “The loan itself is relatively simple, the complexity occurs around the whole structure and purpose of the borrowing entity.”
Brokers are being urged to train up to ensure the nature and complexity of the product is property understood – and to help identify ways to seek opportunities to market the product.
Foley said SMSF lending provides great opportunities for brokers to work with a team of specialist advisors – each focussing on their part of the overall transaction.
While a number of lenders have SMSF products available, not all publish their policy documentation on their website, which assists with processing of the loan.
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