How Vendor Finance Can Help The Homeless

Buying a home that your family can truly call your own may be one priority you still have to achieve

. As your family grows, the necessity can certainly become more urgent though. Because of this, you may think that seeking a loan from the bank is one of the most prudent things to do. However, this may prove difficult if you haven't saved enough deposit in the bank or your credit rating can't guarantee your approval for any loan application you might make.

If this is your situation then the best way to avoid embarrassment in front of a hesitant bank manager is to approach the home's owner or seller and ask him if he will consider vendor finance. There's always a small chance that he'll disagree but the advantages and opportunities that this mode of payment presents to him should far outweigh any of the disadvantages . What you see as a solution is also seen as an opportunity to the vendor. Therefore, it's actually a situation where there are no losers.

If you seek a bank loan for it, you'll have to prepare a lot of documents before you can get the required cash. Most of these are meant to prove that you can pay the mortgage regularly. With vendor finance, you'll more likely get a new home faster because you don't have to comply with too many requirements. The vendor will see to it you get the house quick because he's also interested in selling the house. Therefore, he won't burden you with too much paperwork prior to acquiring the house.

The seller will certainly enjoy the fact that he won't be bothered by any third party entity in completing the transaction for your home. This is because he doesn't have to ensure that someone from the bank is present when closing a deal. He'll also relish the idea of not having any real estate agent for the sale. He may need one if he's finding it hard to sell the house himself. The problem however is that a real estate agent will diminish any income made from the sale.

One other thing that you'll find good in vendor finance is your freedom to make improvements to the property at the earliest time possible. As soon as you occupy the home, you can already introduce some alterations that you may deem as necessary. This privilege is very important, especially if the house is a bit old. The improvements can be made even if you are still paying for the home.

Repossession should not worry you when you have vendor finance because there are no banks or creditors owning equity in your home. The seller can just fix the payment schedule or penalize you financially for delinquency. The penalties should be stipulated in your agreement though. Since the vendor is the one who faces the most risk, he may make sure that the agreement you made with him is binding as a legal document.

by: Kerrie Kelso

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