Vendor Financing of parents

Viewing 3 posts - 1 through 3 (of 3 total)

Tony Fleming
Participant
@the-dark-knight
Join Date: 2008
Post Count: 396
January 8, 2011 - 9:12 am
Hi,
     I was just wondering if anyone can explain vendor financing more in depth than what I've being able to find. My parents want to move interstate and i want to purchase their home of them but I'm only able to borrow 65% of the value. Can you set it up that i borrow the 65% from a bank and just pay the 35% with interest back into their account over an agreed time. Is that vendor financing?
            Cheer's,
                        Tony
Tony Fleming | Triumphant Property Group
http://www.triumphantpropertygroup.com.au
Email Me
NSW Buyer's Agent specialising in Western Sydney-Blue Mountains-Orange-Albury
Paul Dobson
Participant
@pauldobson
Join Date: 2003
Post Count: 1,196
January 10, 2011 - 10:47 pm
Hi Tony
The idea you mention above will work, as long as you can find a traditional lender to accept any declarations that your parents might give regarding the staus of the 35%. I'd suggest you talk to one of the great Mortgage Brokers in the Finance sub forum here.
While the idea you mention above is best for your parents, i.e. they at least get 65% now, if you can't get the 65% from a traditional lender, then you may consider buying the property from them with an Instalment Contract. This isn't as good for your parents, in that they get a lot less up front.
I'd suggest you try the 65/35 route now and we can talk more about an Instalment Contract later, if needed.
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone Me
An alternative way to finance your home.
Kent Cliffe
Participant
@kent-cliffe
Join Date: 2011
Post Count: 110
February 10, 2011 - 7:28 am
Hi Tony,
Is it essential for your parents to receive 65% payment for their house? If not, you can use a 2-3+ year lease option. Basically you can set it up how you want, but I’ve seen it in the past where:
1) Family member rents property @ the lending costs of the owner
2) Owner agrees (option contract) to sell it for today's price in 3 years time.
3) Family Member uses equity from the 3 years of growth to finance the purchase
4) Have an option to extend lease option encase you don't get funding after the first 3 years.
But it still doesn’t guarantee bank lending and property could go down in 3 years (unlikely – but could be worse off)