How does it work?

What is Vendor Finance?

If you borrow money from the bank to buy a home then your using “Bank Finance”. Therefore when the owner of the home finances you the purchase price of the home, it’s called “Vendor Finance”

Who buys a House from us?

Our customers are people who can afford the payments for a home but don’t qualify for a home loan today. There are many reason the bank has said no. Below are some of the most common:

  • Don’t have a big enough deposit.
  • Are self employed.
  • Have a credit problem of some kind.
  • Have no credit history.
  • Have not been in their current job long enough.
  • Have not lived at the current address long enough.
  • New Migrants.
  • Any reason the bank comes up with to say NO!!

How does it work?

OPM Properties purchases houses especially to sell on Vendor Terms / Vendor Finance. You, the purchaser makes payments to OPM Properties until you are able to go to a bank and qualify with them. The payments would be the same as if it were a 30 year loan, worked out the same way as banks do. The contract is set up over 5 years but you are able to refinance or sell the property at any time you choose during the contract term. We encourage our purchasers to refinance as soon as they are able to do so as we are a stepping stone for you get into the system, not the end solution..

When we sell a house to you, you will receive a normal Contract of Sale for your state; it will also  include additional information about your loan repayments and how they are calculated. The price of the home is fixed at the time of purchase and will reduce over time as you make principle payments. We will provide you with regular statements showing your payment history, which will assist you in refinancing with a bank later on.

Your loan will have a variable interest rate, just the same as the major banks do. Your payments will go up if bank interest rates rise and your payments will go down if bank interest rates fall, just the same as the major banks do it.

How do I apply?

To apply for a house you will need at least one kind of earned income between all applicants. Our approval process is extremely simple. Simply fill in the Information Request and we will assess your affordability for you. Click here for the Information Request sheet..

When can I get my own loan?

As soon as are able to qualify with a bank or other lender you should do so. We are a stepping stone from no home to getting into the regular banking system.

The title will also transfer to your name when you refinance.

How do I get equity?

Before you can get your own loan you will need to build up your equity in the home.

There are three ways to increase your equity. You have control over two of them.

  1. Make additional payments.
  2. Make improvements to the house.
  3. Wait for the house to go up in value all by itself.

You won’t be able to refinance unless one or more of these things happen, and as stated above, 2 are in your control.                              

How much money do I need?

Our usual deposit is $5,000 plus the First Home Owners Grant if applicable. If you do not qualify for the grant then your deposit will depend on your income. We are pretty flexible and can discuss this when you make contact with us.

The only fee involved is about $1,200. This is paid when we assess your able to afford the payments on the house. The $1,200 is used to pay the solicitor to prepare the documents for you to purchase of the house from OPM Properties and is not refundable once the documentation is prepared.

When do I pay my deposit?

The deposit is payable upon signing the contract prior to moving into the house.                             

What about the First Home Owners Grant?

If you, or your partner has never owned a home before then you may be eligible for the grant. We will provide you with the application if you meet the criteria for the grant. You can find out more about the First Home Owners Grant at www.sro.vic.gov.au.

What are my repayments?

Your repayments are generally principal and interest. The amount of your repayments is in your contract and will be explained to you in full. All repayments are to be made according to the contract. This is weekly, fortnightly or monthly. This is usually decided depending on when you get paid. Your payment is made up of your loan repayment and a weekly allowance to cover rates and insurance. At the moment this allowance is about $40 to $50 a week depending where you live.

Who pays the Rates and Insurance?

You are responsible for the payment of Building Insurance, Water and Council rates. They are paid by OPM Properties out of the $40 to $50 per week allowance that you pay with your repayment.

How do I make my repayments?

We only accept repayments by weekly Direct Debit with Integrapay to OPM Properties or from your pay office directly..

What if I want to make extra payments?

Extra payments can be made at any time and will help build equity in your home.

You can’t decrease your payments below the minimum required, and your loan has no redraw facility, so you shouldn’t make extra payments if you are likely to want them back.   

What if I can’t make the repayments?

If for some reason you are unable to make your payments , you should contact us immediately to discuss the matter. It is essential that you maintain contact with us if there are genuine reasons for late payment. Situations cannot be resolved unless you contact us.

Can I be asked to move out?

Your contract can be cancelled if you are in arrears by a certain amount and you don’t pay the outstanding amount within a given time. The legal process for non-payment is detailed in the contract of sale. This process is similar to the system the banks must follow. We have found in the past that things go wrong in peoples lives and we are usually able to fix any problems with our internal resolution process.

Do I need to use a solicitor when I buy a house?

We encourage you to seek independent legal advice to ensure that you understand your contract.  Conveyancing is only required when you refinance or pay out your loan. That’s up to you.

What do I do next if I am ready to buy?

The quickest way to get started is to contact us now.

This information is not financial or legal advice. It is intended to be a guide to the service we provide. We reserve the right to change or improve our systems at any time. You should seek independent financial and legal advice before buying a property using our services.