Vendor Finance options

[mins]

I need some advice or thinking outside of the box. I want to buy an owner occupied property which could be worth from $450 - $550k. At the moment I have approx $38k at my disposal and no current property to leverage off.

I was wandering if the following could be possible. Put down the deposit and vendor finance the balance for 12-18 months and then refinance. OR vendor finance the remaining part of the deposit to make up the 20%, borrow 80% from bank and pay off the vendor finance amount with interest and/or with an end date in mind ... say 3-5 years depending on the amount.

Also my local area doesn't have any properties currently available on vendor finance. If I find a property I wish to purchase (which I have seen many), how can I get the vendor to consider vendor finance and will the real estate be supportive or talk them out of it?

I do appreciate any assistance and advice.

 

[Terryw]

If you vendor finance the balance for 18 months what if you cannot refinance out in time? The Vendor could repossess the property and you could lose your $38k.

If you go the vendor financing of the deposit I think you will find it very hard to find a lender willing to accept this.

 

[Marty McDonald]

Keep saving or you have enough deposit now for a 95% ish loan which are available through many lenders (although with stricter than normal requirements).

$500,000
+ $2500 costs
(no stamp duty if you are first home owner and in nsw. This finishes on the 31/12/2011
though).
-$38,000 deposit
- $7000 fhog
=$457,500 loan required
= 91% lvr
= say $9k mortgage insurance which can be borrowed and added to the loan.

 

[Rolf Latham]

Im with Marty on this one.

Not against VF per se, just seems if u can do it off your own back, do it

ta
rolf

 

[mins]

agreed about if can do myself I would prefer too. I have owned property before so I am not a FHB. Also I am mainly commission based so the main issue I have is that I need 10% genuine savings OR 20% deposit.

 

[random]

Wow , that's an expensive place for regional , isn't there anything 1/2 that around for a start ?

At any rate , mine are all regional so I've had to do quite a few tricks over the years, which always makes me laugh when I read "outside the box ' around here - if only they knew !
20% on that sort of amount is still lots of extra mooler to find on vt , you'd certainly want to have the old safety net built into the agreement encase you had any prob's.
Forget agents , doing this stuff through agents is a nightmare when it can be done very simply between you seller and any good solicitor - which is the biggest
challenge but anyway !
I wrapped a couple of them at the start , reno'd ,resold , just paid
out the balnce owing on wrap , kept the change.
Others I negotiated 20-40% with owner and found banks willing to go the balance on thatarrangement , which took a bit but doable , a good broker can help with that.

Another thing , if there's plenty around you'll find someone willing but you just have to be prepared for a few knock backs.

Good luck

 

[mins]

thanks Random. Appreciate the support. To get anything near town on acres is frightfully expensive. Anyone would think we were living in Sydney. The only reason I am considering this is that I would prefer my dream home I can stay in for the next say 30-40 years. Also with the land there is the possibility of subdivision as the regional town grows.

I will keep looking and thinking but thanks for the comments.

 

[random]

No worries , good luck . You'll get something and I know you won't wanna know this but you may have to lower your sights a little though.
Something very coincidental , I wanted that 3 states and 6 houses ago but it did take a climb in the end but hey , never listen to anybody telling you never , anything's possible.

Cheers