Purchasing Homes with Vendor Finance (also known as Seller Finance )

Vendor finance or seller finance involves the property vendor (seller) provisioning the finance for the transaction of a property sale. Seller finance may take the form of what are known as instalment contracts or instalment finance, or seller deposit finance arrangements all of which may be applied to enable the sale of a property. Such transactions may occur without the need for any bank lending or reduced bank lending. Seller finance terms have been used in Australia since at least the 1880's, and has been most popular when bank finance has been difficult to access.

Instalment contracts usually involve the seller, rather than the banks, providing a loan to the purchaser to buy the property. Its as simple as that. If and when you are able to do so, you can refinance your loan with the seller over to the banks, at any time. Homes purchased in this manner will suit buyers who are low on deposit, have recently started a new job or migrated / relocated, have a checkered credit history, or are self employed and it is difficult to demonstrate income to the banks' required lending criteria.

Deposit finance may be provided in instances where the purchaser may qualify for bank finance to purchase the property, but are short on the deposit amount required, which the bank will not cover (typically 20% of property purchase price, without mortgage insurance).

Further details on how vendor finance operates from a legal perspective can be found at Cordato Partners. More information can also be found at the Australian Vendor Finance Association, of which Houses to Go is a member.

If you are interested in the opportunity of purchasing a home available through Houses to Go or would like to discuss with somone further, then you can Contact Us Here.