For lenders that have SMSF products, you are able to submit an application for applicants that are buying an investment property through their SMSF.
The Applicant structure is tricky - and you need to ensure it is correct to ensure the borrowers, security and title are treated properly by your lender.
This article outlines to correct way to enter the data in Loanapp correctly for an SMSF.
Toggle SMSF to YES in the Setup screen
When you create your new Loanapp application record,, you will be able to 'setup' the application. You will be able to give the record a title and add the high level details of loan amount and settlement date.
Importantly, for an SMSF application, you should toggle the SMSF question to YES.
Add all of your Applicants
This is the most important bit to get correct, as there are always a number of parties to an SMSF application, and they must be of the correct borrower type.
In general, an SMSF has:
2x Trust Applicants
An SMSF Trust, a co-Borrower; and
A Bare/Security Trust, a guarantor
2x Company Entities
A company for the Trustee of the SMSF, the Primary Borrower; and
A company for the Bare/Security Trust, a guarantor, and the entity that will hold the security property for the SMSF
Person Guarantor/s
Add the Primary Borrower: the Pty Ltd Company that is Trustee for the SMSF
Click Add Applicant, and select Company:
Add the name of your Pty Ltd Company that will be Trustee for your SMSF, and ensure it is the Primary Borrower:
Add the Co-Borrower: the SMSF Trust
Click Add Applicant, and select Trust:
Add the name of your SMSF entity, and ensure it is the Co-Borrower:
Add the Guarantor: the Bare Trust Company
Click Add Applicant, and select Company:
Add the name of your Bare Trust Company and ensure it is a Guarantor:
Add the Guarantor: the Bare Trust
Click Add Applicant, and select Trust:
Add the name of your Bare Trust, and ensure it is a Guarantor:
Add the Guarantor/s: Person Applicants
Finally, you will want to add your Mr and Mrs Person Applicant Guarantor/s. Click Add and select Person Applicant:
And add the details of your Person Applicant Guarantor:
(repeat for how-ever many Person Applicant Guarantors you have)
You will now have the structure of your application ready to be worked through with more detail:
Complete all the Personal Details for your Person Applicant Guarantors
You can click through to the Person Applicant screen/s to complete the details of your Person Applicant Guarantors, which is the regular information you provide for mortgage applications: Name, DOB, Contact Details, Employment etc.
Your Applicant Guarantors will need to have their Identity Verified. Depending on your Lender's configuration, Loanapp may trigger a Digital Consent and then a Digital ID Verification to each of your Person Applicants.
Complete the details of all your Company and Trust Applicants
Go to the Company that is the Primary Borrower (the trustee of the SMSF), and complete the detail. You should add the Directors and Shareholder details (these should only be the same as your Person Applicant Guarantors - the Members of your SMSF)
You will note that if you use the ABN lookup (by entering in the Company ABN), the ABN Lookup will return the detail that this Company is noted as an ATO Regulated SMSF. This is handy to check to ensure you have the correct Company as the Primary Borrower:
Next go to the SMSF Trust for this Company and complete the detail.
Importantly, the Trustee must be the Primary Borrower Company;
and the Beneficiaries (should be your Person Applicant Guarantors):
Next go to the second Company (a Guarantor) that is Trustee for the Bare (Security) Trust and complete the detail.
This is the Company that will hold (own) the Security Property, and is guaranteeing the loan with the security.
The Directors and Shareholders of this company should only be your Guarantor Person Applicants:
And finally, go to the Guarantor Bare (Security) Trust that has the Guarantor Company as Trustee and complete the detail:
When you have completed this detail, you will have ticks against all of your Applicants:
Complete the Financial Position of the Applicants
Loanapp will present to you a Financial Position page for each of your Applicants (including each of your Company and Trust entities).
Entering the Financial Position details of your Guarantor Person Applicant/s is pretty straight forward - enter their Assets/Liabilities, Income and Living Expenses.
A key item that you will want to ensure you enter is to enter the superannuation contributions that are being made to the SMSF. This detail is added into the Income section under Other Income:
In this section you can add any Super Contributions made:
Complete all the detail for your Person Applicant Guarantors, and then go to each of the Financial Position pages for your Company and Trust Applicants to add details.
Most lenders do not require Company or Trust Income details for an SMSF. The detail you need to complete will depend on your Lender's configuration.
Add your Security Property, and ensure your (Guarantor) Company to the Bare Trust is the 'owner' of the property
When you add the detail of your Security Property, you need to ensure the ownership is set to be 100% owned by the guarantor company that is trustee to the guarantor (Security/Bare) Trust. You can also add expected rental income:
In the Loan Details section, the Primary Borrower Pty Ltd Company should be the Borrower for the application:
ensuring the Primary Borrower (Pty Ltd Company) is registered Borrower:
The Products, Supporting Documents and Print Forms should all be configured to match the SMSF logic of the lender.