Personal Guarantee SMSF buying plus offset account

[LucyLu]

I understand that even though buying through SMSF is a limited recourse loan, lenders require a personal guarantee. Do you know which lenders do and which don't or is it negotiated on a case by case basis?

Also I hear that some offset accounts offered are not the full rate offset accounts - what to look for/ask about when deciding on a lender and the offset account?

 

[Shahin_Afarin]

Only amp and stg do offset but you pay a premium on the interest rate.

Macquarie is a no frills lender in the SMSF space - interest rate, ongoing fees (none) and upfront is much cheaper than the other guys. However you do need to service outside the SMSF (regardless of if you are doing voluntary contributions) and you do need to have a 10% super buffer. Their servicing calc is also conservative.

Also re AMP and Mac - you cannot use proposed employee contributions if you haven't demonstrated doing so in the past 2 years. Whereas with St George you can do this.

For me its usually a toss up with with Mac and St George depending on the client and situation.

NAB is very hit and miss and their product is just not competitive.

 

[HLE]

Hi Lucy,

Some lenders do not require a personal guarantee if the rent plus your past super contributions (if self employed) or employer super contributions (if employed) are sufficient to prove that you can afford the loan.

If you need to make extra contributions then the norm is to have you as a guarantor.

 

[Aaron_C]

Lucy - just speak to your broker about it and they will tell you what is best. Shahin has provided a good summary though.