FAQs
Your Vendor Finance questions answered
What is Vendor Finance?
Vendor Finance is an alternative to a traditional bank mortgage. Vendor Finance is when the house seller lends the house buyer the money to buy their property for an agreed period of time (for example, two years). In return, the house buyer will pay the house seller a monthly interest rate on the loan.
Is Vendor Finance new?
No. Vendor Finance has been used for property and land purchases in the UK for more than 100 years.
Do I need to give money for the loan?
You do not need to give cash for the loan. The loan is a written contract that is agreed at the same time as the house purchase. The loan is usually the same value as the purchase price. When the house purchase is complete, WalterFrank will pay you money as monthly interest for the period of the loan.
How can Vendor Finance help my house sale?
Vendor Finance is a quicker and simpler way to sell your house. A bank mortgage is not required as all the terms of the sale and finance are agreed between you and the House Buyer.
Is Vendor Finance a good thing for me?
Vendor Finance is a way for you to make more money from the sale of your property as the House Buyer will make regular payments to you during the period of the loan at a higher interest rate than high street bank savings accounts. If you need the money from the sale of your house in order to move on, then Vendor Finance will not be appropriate for you.
How do I know my loan is secure?
When you sell your house to the House Buyer, you will have a first charge over your property as security for your loan – as a bank would when it holds a mortgage over a property. Your name will be on the property title deeds enabling you to reclaim your property in the unlikely event that this is required.
What will the written contract include?
The loan contract is a legal document prepared at the same time as the usual legal work for the house purchase. The loan contract will include:
- How much the loan will be
- How much money you receive as monthly interest payments
- When the loan will be repaid to you in full
- Your security for the loan
- Confirmation that your legal costs will be paid by the House Buyer.
When will I get my money back?
You will organise a repayment plan to suit your requirements. Usually the loan period is between three to five years. The loan repayment date will be stated in the contract. WalterFrank has always repaid Vendor Finance loans on or before the agreed repayment date.
WalterFrank have successfully worked with Vendor Finance sellers before. Get in contact if you would like to find out more.
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