All Topics / Help Needed! / Seeking Vendor Finance – Vic

Viewing 17 posts - 1 through 17 (of 17 total)
  • Profile photo of EmmaSeeksFinanceEmmaSeeksFinance
    Member
    @emmaseeksfinance
    Join Date: 2009
    Post Count: 5

    Good Morning All

    I am seeking vendor finance. I would like to buy a property in the Latrobe Valley area of Victoria. Here are the facts up front:

    I am a dishcharged bankrupt (messy divorce left me holding the bag financially) did not default on mortgage and all loan payments were up to date prior to filing.

    I am not eligible for FHOG.

    I am 32 years old and earn $60k per year. I have one child.


    Currently I pay $125 per week rent on a house in Morwell, and am saving $200 per week.


    I can afford comfortably approx $250 per week in repayments.


    I have few preferences for the home – something needing work is fine, I just want to start over.


    So far I only have a small deposit, but have heard of vendor finance being offered with a deposit as low as $1000-$2000.


    My Mother who owns a $350k home in Mornington Vic will co-sign for the loan if required.


    Please don't judge me like that Spud guy. I don't have multiple cars or excess anything lol.


    If anyone is able to help me – I would love to talk to you. Please email me at
    [email protected] or sms or call me on 0414 489 998.


    Thanks & Regards


    Emma

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    Hi Emma

    Firstly welcome to the forum and i hope you enjoy your time with us.

    Certainly i dont in anyway wish to appear to be putting you down as i have done hundeds of Vendor Finance deals over the years and really enjoyed the experience in dealing with many of my eventual buyers.

    I would however point out a quick comment in relation to affordability and the payments you feel you can maintain.

    You mention that you are able to afford a repayment of $250 / week circa $1075 / month.

    On the basis that a potential investor buys the property he will wish to mark the property up by at least 20% depending on the initial purchase price as he will need to not only cover his outgoing costs such as stamp duty etc but also profit on the transaction. In addition he will wish to mark up the interest rate he is being charged and in turn pass this onto you.

    Your repayment to the investor will then be calculated on the end price and end interest rate.

    Based on a 25 year term and say 1.5 above the variable rate this would mean that you could support a loan of circa $155,000. if we assume that the figure has been inceased by say 20% it would mean that the initial house purchase will have been for around $125K.

    Admitedly i do not now the Latrobe Valley area particularly well but am unsure as to whether you can purchase a property for this sort of amount.

    Richard Taylor | Australia's leading private lender

    Profile photo of LinarLinar
    Member
    @linar
    Join Date: 2004
    Post Count: 567

    I have been away from the forum for a couple of weeks and have just read the spudway thread.

    Emma, you are a very brave woman putting this post on the forum!

    Good luck.  I hope you get finance.

    Cheers

    K

    Profile photo of spudwayspudway
    Member
    @spudway
    Join Date: 2009
    Post Count: 39

    hi emma
    stick with it ..if you don't give up you will get there …we had lots of knockers but we worked hard on getting finance and got it …i must point out thou we havant got lots of cars we had 2 cars ,,one now as we sold one and a truck ,,we only got the truck to save $$ as we are moving some 3000klm and revivalist would cost around 8.5k …we will be able to sell the truck for at least 10k .i bourt truck at auction for $3500 ..so we will make a profit on the move and pay of our loan sooner
    good luck

    Profile photo of ducksterduckster
    Participant
    @duckster
    Join Date: 2004
    Post Count: 1,674

    Emma,
    You need to be aware of the possible pitfalls to you of vendor finance. Get a solicitor to go over the contract with you because if the investor is not ethical they sometimes take all your payments if you get behind in repayments and take the house back.

    Another scheme that I have read about is where the tenant rents to buy the house.
    The tenant pays extra on top of the rent but the extra goes into an account and builds up as a deposit.
    At a later stage the landlord sells the property to the tenant and the tenant finds the required finance to buy the market value – saved deposit.
    http://www.consumer.vic.gov.au/legalchannel/dojfilelib.nsf/lookup/cav_publications_credit_and_debt/$file/vendortermscontracts.pdf
    http://www.lplc.com.au/documents/DECEMBER08_InCheck41_F.pdf

    additional resources you might find useful (not a recommendation by me)
    see
    http://www.renttoownyourhome.com.au/
    http://easyhouses.com.au/buying.php
    http://www.vendorfinancehomes.com.au/
    http://www.haveyourhome.com
    http://www.vendorfinancerealestate.com.au/buy-26.htmlhttp://www.webuyhouses.com.au/SC04/SC04_4/default.aspx

    this web site has people advertising for vendor finance like you
    http://melbourne.gumtree.com.au/f-vendor-finance-Classifieds-W0QQKeywordZvendorQ20finance

    Profile photo of kum yin laukum yin lau
    Member
    @kum-yin-lau
    Join Date: 2006
    Post Count: 342

    Hi, Richard Taylor has hit the nail on the head as usual. $250 pw won't be enough to get you there.

    The alternative may be rent to own. This has a big advantage if you're eligible for housing rebates. Eg in SA, rent subsidies can be up to 50%

    Good luck,

    KY

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    KY is right and in Qld i would have suggested a License to Occupy style contract.

    You dont qualify for the FHOG so that isnt going to be an issue but if you qualify for rent assistance the Vendor / Investor may have more confidence in taking the deal on as he can assign the rent directly to himself and you pick up the balance.

    Shared Equity is another style of purchasing in conjuction with a Vendor who wants to retain ownership of say 50% of the property or even a balloon style lease repayment at the end to pick up some capital growth.

    Richard Taylor | Australia's leading private lender

    Profile photo of EmmaSeeksFinanceEmmaSeeksFinance
    Member
    @emmaseeksfinance
    Join Date: 2009
    Post Count: 5

    Thank you so much for all of your reponses – I am learning all I can about vendor financing.

    I have one important question – does the vendor own the house 100% before they can finance it to me? or is there a risk that they could default and I could lose the house?

    Houses in my area can easily be bought under $100k so I don't think i will have trouble finding one.

    Have had two parties contact me from this site – and I hope I can work something out to get myself a house!

    Thanks again :O)

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    Hi Emma

    Normally your Vendor would need to buy the house first and then offer you a contract to purchase the property.

    Yes there is always the danger that the wont make their loan repayment so make sure you are happy with the intergrity of the person concerned.

    Anyway good news on the purchase price good luck and let us now how you go.

    Richard Taylor | Australia's leading private lender

    Profile photo of EmmaSeeksFinanceEmmaSeeksFinance
    Member
    @emmaseeksfinance
    Join Date: 2009
    Post Count: 5

    Well turns out I need a much bigger deposit for the person who offered to help – So I am still seeking help! Can afford $2000 deposit at the moment, I know it will mean higher repayments but I just want to get into the market so I can start fixing something up and then in 2-3 years time have some equity to refinance with.

    So if you are someone who offers vendor finance please consider me!

    Thanks

    Profile photo of enaajaenaaja
    Member
    @enaaja
    Join Date: 2009
    Post Count: 26

    Hi

    Correct me if i'm wrong, though I thought if been bankrupt you were unable to get any loans – Including vendour finance.

    Profile photo of gibbo1gibbo1
    Participant
    @gibbo1
    Join Date: 2008
    Post Count: 152

    Once you have been discharged you can apply for credit

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    I think even while bankrupt you can get a loan – if someone will lend to you.

    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

    Profile photo of elkamelkam
    Member
    @elkam
    Join Date: 2006
    Post Count: 722

    Hello Emma

    Have you been to a bank to try for a normal mortgage loan?
     
    I'm sorry for my ignorance but if what gibb01 posted is correct than you may be able to get a bank loan which will be better interest than vendor finance. Of cause you will most probably need your mother to guarantee the loan but you said in your first post that she is willing to.

    Alternatively, if your mother was willing to take out a loan of around $25K – $30K on her house and lend it to you for the deposit and costs a bank may be more willing to lend you +/-$80K. 

    A $30K loan over say 5 years at 6.5% will cost you about $590 per month
    A $90K loan over 25 years at 6% will cost you about $580 per month 

    Your loan repayments for both loans will then be about $270 per week.

    I don't know if banks are still lending for 30 years but that would help the repayment figures for the loan of $80K- $90K.
    Also you may consider fixing the interest for the 5 year loan ( or a longer term if your mother and the bank where willing) and maybe even the first years of your house loan. Sooner or later interest rates will go up.

    Even if you don't manage to get your house straight away remember that saving $200 per week gives you $10,400 per year  towards your house. :-)
    Do you believe that houses in the area will have capital growth in the next year or two?

    At $125 per week rent that's not expensive living.
    In your own house, besides the loan repayments, you would still have council rates, water, house insurance and maintenance costs. 

    Wishing you all the best. I'm sure you will get there.

    Elka

    Profile photo of EmmaSeeksFinanceEmmaSeeksFinance
    Member
    @emmaseeksfinance
    Join Date: 2009
    Post Count: 5

    Hello Again All
    Well let me update you, two years ago my mum got a mortgage for me on a property using her home as collateral in Traralgon.
    I have renovated thoroughly and will make a $35k (I hope) profit when I sell.

    I am relocating to Queensland for a lifestyle change (my brother and his family there at the start of this year).

    Mum isn’t working anymore and isn’t willing to use her home now as a guarantee for me..

    I will be seeking vendor finance, or rent to buy for a $200k approx property around Deception Bay Qld.

    I anticipate having a $20k deposit, but as an ex bankrupt I still don’t like my chances of getting a bank loan.

    Suggestions?

    Anyone interested in financing me?

    Email me at [email protected] I can provide payslips and mortgage statements showing my payment reliability and am confident in my ability to quickly secure a job in Qld, based in current vacancies.

    Please Contact me to discuss further.

    Thank you in advance!

    Emma

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    Emma Vendor Finance is still regulated by NCCP so you wouldnt get any vendor finance company to do the deal unless you have gainful employment in Qld.

    Cheers

    Yours in Finance

    Richard Taylor | Australia's leading private lender

    Profile photo of docboatdocboat
    Participant
    @docboat
    Join Date: 2010
    Post Count: 1

    Hi Emma

    Drop me a line on bfwalker_at_gmail.com ?

    All the best
    Brian

Viewing 17 posts - 1 through 17 (of 17 total)

You must be logged in to reply to this topic. If you don't have an account, you can register here.