Who Is It For?

Is Vendor Finance right for me? There are many reasons you may not be able to get a loan from the bank to buy a house. This does not mean you can’t buy your home. It just means you have to do it a bit differently.

Some of these reasons include:

Bad credit
Not enough deposit
Self Employed
New Immigrant

New Job
Recently divorced
Too young / old
Already own property

bank says no to your loan application to buy a house

Buying a house, with or without a bank, is a big deal and should not be taken lightly. You still need to be able to afford the repayments, so you need to have sufficient and secure income. Just because you don’t have to go to a bank at first, it doesn’t mean you don’t need to qualify with the sellers own criteria before you can get in!

The difference is that the seller can be more flexible. Because the seller takes on a bit more risk, it is fair to expect to pay a bit more than you would to a bank.
For this reason, you will usually be required to, or want to, refinance in the future and get a loan or mortgage to complete the purchase. This could be anywhere from 6 months to 10 years after moving in, depending on the individual sale agreement.

To find out how to qualify CLICK HERE.

Sound Confusing? Click HERE to find out How It Works or  Click HERE to find an EXPERT in your area that can explain how it might apply to your personal situation.

What to look out for: Pros and Cons
pros and cons of buy a house vendor finance

Buyer Pros

  • You don’t need to go through a bank to get started!
  • You get the time you need to qualify for a bank loan.
  • You get to move into the home that will become yours.
  • Payments that you make go into owning the house, not into a landlord’s pocket.
  • You don’t need a huge deposit to get started.
  • The price you agree upon stays fixed until you settle, even if the value goes up.

Buyer Cons

  • You will often pay a bit more for the opportunity of buying without qualifying for a bank loan.
  • The title of the property does not transfer to your name immediately, although you do have legal control of it, and it cannot be sold to anyone else.
  • If you default on your payments, you could risk losing your deposit and/or repayments.
  • If the value of the property drops before you settle, you usually still need to pay the initial agreed price.


Important to know

  • The seller is not a bank! They can choose the terms of the agreement you have with them. This can be both beneficial and detrimental so be sure you understand the terms completely.
  • You will still need to be able to afford to buy a house. This is no different to buying with a bank loan!
  • You will still need to qualify with the seller before they will agree to sell to you. Don’t quit your day job!
  • You will still need to sign legal contracts and agreements.
  • You should have a lawyer that you are comfortable with, that understands vendor finance and you should read the fine print!
  • Every seller is different. There are laws and regulations that they must abide by, however no two transactions are ever exactly the same.


Want to know more? Download a FREE guide here:

download free guide

Download Now!

How to buy without a bank


Disclaimer: This guide is for reference only. It is not a comprehensive explanation of how vendor finance works and should not be considered advice. SEEK LEGAL ADVICE BEFORE YOU SIGN ANYTHING.

Add a Review