All Topics / Help Needed! / vendors finance

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  • Profile photo of Dr.SpockDr.Spock
    Participant
    @dr-spock
    Join Date: 2004
    Post Count: 69
    October 4, 2008 - 2:21 am

    Hi everyone,

    The owner of the property we are renting asked us if we would like to purchase the house, and if so no agents, they will sell it to us for 226,000.00 very cheap for the area we live. We were thinking of asking him for vendors finance due to bad credit rating with one of use. Can some please tell me WHAT IS VENDORS FINANCE? AND HOW IS IT LEGAL WITH A SALE OF THE PROPERTY? e.g. does the house stay in the name of the vendor

    A response would be good as I have to let him no today sat 4/10/08 if we are interested in buying

    thanks

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213
    October 4, 2008 - 4:20 am

    There are 2 forms of vendor finance.
    1) is where he lends you the deposit and you buy the house as per normal

    2) is where you buy the house from him and pay it off in installments. The title will stay in his name until you make the final repayment. If prices rise and your situation improves you may be able to refinance this loan with a bank after a year or 2 and pay him out then, and transfer the title into your own names – and get a better rate.

    Banks don't like either of these options. They are unlikely to lend on option 1 if they know the vendor is going to be lending you money.

    If one of you has bad credit, maybe you can just purchase the home under one name?

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

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