Seeking Vendor Finance – Vic

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.

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

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

Once you have been discharged you can apply for credit

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

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