How to Acquire a Property using SMSF Loan in Australia

The SMSF lending prospects have considerably changed, and the number of SMSFs in Australia has increased by 15% in the past five years.

An SMSF property loan lets people borrow money from lenders to buy assets such as home or real estate property. One such benefit of investing in an SMSF loan is that it helps in generating both income and capital gain for the long term.

Home purchase using an SMSF

An SMSF is a savings account managed by individuals for their retirement instead of the one managed by a superannuation provider. To invest in an SMSF is a highly regulated process. It is suggested that the borrower seek advice from professional mortgage broker Sydney to understand the responsibilities and process correctly. This guide will help to understand how to process SMSF property loans in Australia.

SMSF property checklist for the borrower

Any Australian individual can invest in a property using an SMSF, but it would be best to brush up on investment knowledge before starting the process. This way, a borrower can approach the lender with confidence. When looking to buy a property using an SMSF, it needs to consider few rules mandated by lenders.

Deposit amount: The deposit should be 30% of property value. Every estimation related to the property needs to come out of the fund.
Proof of advice: Every lender will eventually demand verified written proof from the borrower’s accountant or financial planner, so it makes sense to keep it with supporting documents from the beginning.
Essential Payslips: Usually, the borrowers have to provide two recent payslips, ensuring the borrower’s ability to make repayments on time.
PAYG statement: It verifies the annual income which a borrower stated in his application form. Major lenders of Australia prefer the latest PAYG statements (past two years)
Super contribution history: When buying a property using SMSF, lenders want to check a minimum of 12 months’ history of the borrower’s superannuation contributions.
Benefits associated with SMSF loan

Reduce tax liability: One such good thing about SMSM property loans is that a borrower might claim any interest expenses on the loan as tax deductions by the SMSF. This strategy likely lessens the tax liability of the borrower as per the necessary tax rules and regulations.

Add value to retirement funds: Many people usually use SMSF home loans in Australia to boost their retirement savings. Due to negative gearing, it is also capable of reducing the effective tax rate.

Can utilise property income to pay off the loan: With an SMSF loan, a borrower can use income from the property to pay back the loan amount. It also allows the borrower to keep their investment separate from the other interests they might have to keep track of return in the long run.

Conclusion: A self-managed super fund (SMSF) can control borrowers’ superannuation and retirement based on their financial circumstances. It is suggested to seek financial advice from a trusted adviser.

If you considering seeking help from a Home Loan Broker in RussellLea Lea, then connect with Rajan Khatak, Director and founder at Your Finance Adviser. He has over 12 years of experience in this field and specialises in providing advice to various customers located across all types of industries in Australia.

Significant Health Benefits of Dental Bridges

If you have missing teeth, a dental bridge is the best solution for you. The gaps in your teeth occurred due to missing teeth could cause other teeth to shift towards the open space causing jaw deterioration. Space in your smile could also cause trouble in eating and speaking and could affect your self-esteem.

A dental bridge is a prosthetic tooth that replaces the missing tooth and restores natural-like appearance and function. Dental bridge works by sitting in the open space of the missing teeth, anchored with the crowns on the adjacent natural teeth or dental implants on both sides. In this blog, let’s discuss some health benefits of dental bridges so that you could make a well-informed decision when you are considering dental bridges in Bridgeport.

Restores your beautiful smile

A gap in smile could negatively impact the self-esteem of an individual. Dental bridge helps restore your smile and ensure that you have a beautiful smile for years to come. This boosts self-esteem and improves the quality of life. With dental bridges, you won’t have to hide your smile or hesitate while socialising.

Improves chewing and speaking ability

Due to teeth loss, you may experience pain and find it difficult to eat your favourite food items. Pain can lead to the surrounding teeth shifting towards the gap. Also, food particles could accumulate in the open space and cause potential damage to your gums. Dental bridge alleviates pain and allows you to eat and chew normally.

Losing teeth could also affect your speaking ability and so you would face difficulty in pronouncing certain words. Because teeth play a significant role in how words form in your mouth, your speech will most likely suffer. Consulting a cosmetic dentist in Bridgeport for dental bridges will resolve issues in the speech that have occurred due to missing teeth.

Maintain your appearance

Tooth roots are responsible for stimulating bone cells in the jawbone. So, as you lose teeth, your jawbone starts to deteriorate, leading to facial collapse and further tooth loss. Dental bridge will help restore the natural appearance of your face as fills the gap and restores oral health.

Prevent shifting of teeth

Your teeth stay in place because they are anchored by strong roots that go deep under the gums. Also, the adjacent teeth play a vital role in keeping teeth in place. After tooth loss, the remaining tooth will start to shift to the gap, creating misalignment and other serious issues. To prevent this shifting, the best solution is to fill the open space with prosthetic tooth via dental bridge treatment.

For more information regarding dental bridges, feel free to contact our team. If you are considering dental bridge treatment or affordable dentures in Bridgeport for your missing tooth, you could get in touch with us for the highest level of oral care.

All about Mutual Funds – How does Mutual Fund work

Investors are looking for avenues that help them grow their money and achieve their financial goals. Investing in stock markets is one such avenue that can help investors grow their money over the long term. But investing in the stock market may not be easy for the first-time investor. Mutual Fund investments on the other hand simplify the process of investing in a pool of diversified stocks, thus taking the hassle out of stock selection for beginners by allowing them to invest in mutual funds.

The meaning of mutual funds is that it is a financial instrument that essentially collects money from investors and puts them in a basket of diversified securities. Let’s understand more about mutual funds and its types.

Types of Mutual Funds

There are three types of mutual funds classified based on their underlying assets. These include:

Equity Mutual Funds: Equity Mutual Fund is a type of mutual fund that invests in stocks that have the potential to grow and generate wealth over the long term. These funds can, in turn, be classified based on market capitalization, i.e. Large cap, Midcap and Small-cap. It can also be classified based on a theme or a sector such as healthcare or IT. Investors can choose equity funds based on their investment horizon and their financial goal.

Debt Mutual Funds: Debt Mutual Fund is a type of mutual fund that invests in fixed income securities issued by the Government or corporates. These include treasury bills, certificates of deposit, debentures, corporate bonds, etc. These can be classified based on their duration (short-term or Long Term Debt Funds called Gilt Funds).

Hybrid Mutual Funds: This is a type of mutual fund that invests in debt, equity-related instruments and gold or other commodity. The objective of this fund is to balance the risk-reward potential for its investors. The equity component enables capital appreciation thereby generating wealth for investors while the debt component acts as a portfolio diversifier and diversify the impact of volatility.
Five Features of Mutual Funds

These are the five features of mutual funds:

Mutual Funds are managed by professional fund managers.
Mutual Funds can be open-ended or close-ended.
Mutual Fund diversifies investor’s money by investing across asset classes
It offers different options according to the investor’s goals, duration, or risk profile
Mutual funds guarantee no fixed returns
Advantages of Mutual Funds

These are the five key advantages of mutual funds:

Liquidity – One of the key benefits about mutual funds is that it offers liquidity and can be redeemed completely or partially and at the prevailing NAV (net asset value).
Transparency: Investors can be at ease about mutual funds since they are regulated by the Security and Exchange Board of India (SEBI) and allows them to track and monitor their mutual fund performance.
Diversification: Mutual funds invest in different stocks and multiple securities, thereby offering diversification and reducing the downside risk of investing in just one stock. A typical equity fund could hold about 35-60 stocks.
Suitable for any wallet size: The good thing about Mutual Fund Investment is that it can be started using a monthly SIP (Systematic Investment Plan) as low as Rs. 500.
Professional Fund Management: Mutual funds are managed by qualified fund managers allowing you convenience and ease of investing.
Thus. mutual funds with the plethora of options and benefits make it a preferred choice for investors. It can help investors achieve their long-term and short -term objectives. Before investing, it is however important to know more about the mutual fund through its scheme information document (SID).