Hi All,
I have recently setup a SMSF and I am purchasing a property in it. However, the valuation came in a lot lower and so I did not get the requested loan amount. To go ahead with the purchase it would mean a bigger deposit as I am borrowing less. However, this goes against my investment strategy. It would mean 90% invested in property, a very small cash reserve and not a very diversified fund. Does anyone know is there anything in the SIS act that would legally stop me going ahead with this transaction. I am trying to get out of the contract but trying to understand the implication of worse scenario of having to go ahead with the purchase. Cheers
Legal advice is needed.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
If the only issue is the val coming low, then it may be prudent to do some val hunting?
How did you get this val? Direct from the bank or was a broker involved?
Is it an upfront val or was a loan application submitted?
Ethan Timor | Aligned Finance Pty Ltd
http://www.alignedfinance.com.au/
Email Me | Phone MeActive Investor & Broker; Based in Northern NSW, servicing Australia wide; Author of '34 Proven Ways to Maximise Your Borrowing Power' (download free from our website)
The valuation came from a financial institution, but it was done through a mortgage broker. It was all done so backhandedly. The mortgage broker company assisted me in setting up everything in my SMSF, but the amount I could borrow came in a lot less due to the valuation. The first I knew was when a solicitor contacted me and the settlement figures didn’t add up. When I started investigating, it turns out the valuation was a lot lower, so the bank lent me less monies and the mortgage broker had simply up’d the deposit without even contacting me.
Subsequently I have got an independent valuation and he valued the property the same as the bank.
I have now got an independent solicitor involved, helping me on the property contract side. Just concerned the risk I am exposing my SMSF to, if I have to go ahead, as I will have hardly any cash funds left and worried I will potentially breaching my SMSF.
Your broker assisting with the SMSF side is illegal so you might have a claim against them through the credit ombudsman or financial services ombudsman.
Was it a related company that sold you the property?
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Yes the mortgage broker was a related company to the property. I know I have been scammed but it is very hard to prove anything.
I am going to file a complaint with the Credit Ombudsman but think it will be too late in relation to stopping the purchase of the house.
What has your solicitor advised?
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
If a mortgage broker set up an smsf without providing a statement of advice as a registered financial planner under an authorised rep or license then they have committed a criminal offense.
Houseofwealth | HOUSE OF WEALTH
http://www.houseofwealth.com.au
Email Me | Phone MeMELBOURNE PROPERTY ACCOUNTANTS
You must be logged in to reply to this topic. If you don't have an account, you can register here.
