All Topics / Creative Investing / Vendor Finance

Viewing 4 posts - 1 through 4 (of 4 total)
  • Profile photo of LinarLinar
    Member
    @linar
    Join Date: 2004
    Post Count: 567

    Can anyone tell me how vendor finance works from a practical perspective?  If, for example, I wanted the vendor to lend me 10% of the purchase price is the best way for the vendor to secure that loan via a caveat, a second mortgage or a deed between the two parties?  Which way is the easiest, which way is the cheapest and which way is a vendor more likely to want to go to ensure that he/she gets repaid?

    Cheers

    K

    Profile photo of Paul DobsonPaul Dobson
    Participant
    @pauldobson
    Join Date: 2003
    Post Count: 1,196

    Hi Linar

    The only difference between a first and a second mortgage is that the first mortgage was placed onto the property's title ahead of the second mortgage, i.e. for both loans a mortgage was signed but the "first mortgage" was placed on the title before the next mortgage (the second mortgage).

    We often supply and receive second mortgages.  We find it is easier to secure our mortgage with a caveat.  If you try to register your mortgage on the title (other than in Qld), it tends to get messy as you need to get a Deed of Prioity in place with the first mortgage holder.  We've found that a caveat protects our mortgages well.  I hope that helps.

    Cheers,  Paul

    Paul Dobson | Vendor Finance Institute
    http://www.vendorfinanceinstitute.com.au
    Email Me | Phone Me

    An alternative way to finance your home.

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

    I have just asked a few lenders if they will accept these sorts of arragements and was knocked back. Lenders now seem to be frowning on vendor finance.

    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 LinarLinar
    Member
    @linar
    Join Date: 2004
    Post Count: 567

    Thanks for that.

Viewing 4 posts - 1 through 4 (of 4 total)

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