Vendor finance has also been called seller finance and is sometimes referred to as rent to buy, or rent and buy.There are many people out there who want to buy their own home, and cannot qualify for a bank loan. Since the Global Financial Crisis in 2008 revealed that some lenders had ‘loose’ lending policies, the banking industry has tightened lending policies and a lot of people are finding it harder to qualify for a mortgage with these large lenders.
Vendor finance has actually been around for quite a long time. it is used widely in commercial and rural property deals, and many car loans and appliance rental stores use a similar system. Using this type of financing solution to purchase a residential home used to be quite common and is now in greater demand and is proving an effective option for both the property seller and the home buyer. Vendor finance is also a viable solution when the property is not selling, because the owner of the house can finance the purchaser into the property, thereby increasing the pool of potential purchasers. often buyers and sellers feel as though they have more control over the buying and selling process, because vendor finance contracts do not involve banks, and rarely have any need for real estate agents either. this can also keep the closing costs down.
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