A standard home loan from any bank attracts a lot of eligibility criteria to be fulfilled including heavy amount of deposits, good credit score, sound repayment history, nature of job and monthly income. The desire of owning a house property would have remained as dream for many with so many conditions to be fulfilled. Here, a buyer-friendly concept of vendor finance has evolved over time in Australia to provide the prospective buyers a breather.
Vendor finance – the easiest way to buy a property
Vendor finance,often termed as seller finance,is basically a method of lending in which the seller lends money to the buyer to buy the seller’s property only without any intervention of any bank.The eligibilities to be fulfilled to avail vendor finance option are also very easy, like having a sound background of paying rents, decent income, good job and a small deposit.
There are business establishments around Sydney, Australia which provide expert services to their clients in acquiring houses in a bank-free environment.These concerns offer tailor-made terms for every buyer to pay back the money, which allows the buyers to own a house and gain flexibility in the payment terms. Many prospective buyers take a look at providers of vendor finance homes western sydney,who offer the choice to the buyers to initially finance the property till the time the buyers are ineligible to avail loans from the banks; as soon as the buyers meet the eligibility criteria to avail the bank loan, remaining portion can be refinanced from any bank.
Benefits of Vendor Finance
Vendor financing option has gained popularity over the years as the same is beneficial to the buyers who are:
- not holding a stable job for enough time
- self employed
- do not have sufficient money to pay the stamp fees
- unable to get the desired amount of loan from the bank as the bank valuation of the property is lesser than the agreed amount
- having some disputes in their credit records
At times, buyers intend to save money to renovate the house after buying. And in such cases also vendor financing comes handy as it allows the buyers some time to pay back a little bit of remaining money to the vendors or sellers.
Vendor finance – buy property keeping banks out of the picture
A home is usually purchased through bank finance or loans from other lending companies in which the buyers do pay a lump sum down payment of 10-20% to the seller at the beginning and the banks pay the remaining to the seller. The relationship between the buyers and the sellers ends here only and the purchaser then pays the loanback to the bank over a long period of time along with interest. However, there is no existence of banks at all in vendor financing as the buyers make a small deposit to the seller at the beginning and pays the rest directly to the seller only over a period of time along with interest or without interest, depending on the agreement between the two parties.
Vendor financing, with all its easier policies for the buyers, comes under legal framework provided by the State and Federal Government laws in Australia. It is to be noted that many might not have heard regarding vendor finance but the concept is not new as the same has been used for quite a long time in real estate purchase and sales in Australia.