Fair Go Homes Pty Ltd

Frequently Asked Questions:

PLEASE NOTE:  Our business model has changed.  Except in rare cases, we will not be buying houses in the forseeable future.  Neither will be be arranging Rent-to-Own or Instalment Contracts as a matter of course. We are now specialising in Second Mortgage loans.  (TIP: look for the red 'SM' below)

Home Buyers:   The list below is a summary of the questions we are frequently asked by people interested in our services, together with our usual response.  Generally, these answers apply to Instalment Contract purchases(IC). Many are not applicable to Rent-to-Own (RTO) or Second Mortgage (SM) arrangements. See the initials at the end of each question to ascertain which one/s it applies to)

What Is Vendor Finance? (IC, RTO, SM)

When you buy the house from us you are called the purchaser and as the seller, we are known as the vendor.

Most purchasers don't have enough money to purchase the property outright and need someone to provide finance.  While we are not a finance provider (like a bank or credit union), we can offer to sell you a property that we own on our sale terms.

As we are the vendor and you will be taking our terms, you are said to be buying the property on vendor terms or vendor finance.  The terms and conditions of the vendor finance are stated as special conditions in the contract of sale.

Is The Title To The Property In My Name? (IC, RTO)

No. If you use vendor finance the title to the property stays in the vendor's name until you have made all your repayments and fulfilled your obligations under the sale contract.

Vendor finance is similar to a lay-by transaction, except you can live in the property as you continue to make repayments.

Why Is There A Mortgage On The House When I Buy It From You? (IC, RTO)

When we first purchased the property we took out a mortgage for generally 80% of our purchase price.

The lender who provided us with finance registered a first mortgage over the property.  Without this mortgage we would not have been able to purchase the property for you.

What Happens If The Vendor Doesn't Make The Mortgage Repayments? (IC, RTO)

The repayments you make are via direct debit straight into our mortgage account, so in essence you make our repayment for us.

We do not redraw on the mortgage account, so once you have made your repayment by direct debit, then you are secure in the knowledge that the repayment has been made.

There will only ever be a problem if you stop paying the right amount or pay late.  As long as you make the correct repayment on time then there will be no problems.

If The Title Is In Your Name, Can You Sell The Property? (IC, RTO)

When you purchase the house your solicitor will place a caveat on the title.  This protects you from our selling the property or further borrowing against it.

We may sell our interest in your property to another person. If this happens, everything continues as normal except you will make your repayments to someone else.

We are not planning to sell our interest in any of our properties.

What Happens If You Go Bankrupt? (IC, RTO)

Provided that all our tenants and property owners continue to pay on time and deposit the right amount we can see no reason for going bankrupt.

Nevertheless, should our company go into receivership or liquidation then our interest in your property might be sold.  If this happens you will make repayments to another person.

The instalment contract includes a clause for your protection that requires us to maintain the debt to the bank at a lower level that your debt to us.

Provided that you have maintained your obligations under the contract you cannot be evicted or thrown out of the house.

What Happens If I Pay Late? (IC, RTO, SM)

We require that you honour your obligations under the sale contract.  You must pay the correct amount on time.  If you fail to do this there are penalties.

Please understand that we must continue to make repayments even if you fail to pay us.

If you breach your contractual obligations then we reserve the right to immediately start legal proceedings and rescind our contract.  If this happens then your interest in the property may be cancelled and we are entitled to sue you to recover any money that you owe.

We know this sounds serious, so be very aware of your (and our) rights and obligations under the contract before signing.

Can I Pay Early? (IC, RTO, SM)

Yes. we encourage you to repay as much as you can as quickly as possible.  We do not offer a redraw facility but if you are ahead with your repayments then we may consider allowing you to skip a repayment so long as you do not go in arrears.

Can I Refinance? (IC, RTO, SM)

Yes.  You can refinance with another lender at any time.

Can I Sell The House? (IC, RTO)

Not strictly speaking.  Since you do not have title to the house you cannot sell something that you do not yet own.  However, if you find a buyer, we can sell them the house, pay off your loan, and you receive the difference.  This presupposes that the amount they will pay is more than the balance of your loan.

What Happens If I Want To Move? (IC, RTO)

If you would like to move without finding a buyer, then you will need to pay for a sworn independent valuation on the property (cost about $300) in order to determine its market value.

Should the sworn valuation be less than what you owe you will be required to pay the difference before we agree to cancel the contract.

If the sworn valuation is more than what you owe then we reserve the right to either sell the property on the open market or pay out the difference direct to you.

Understand that when you purchase the house you enter into an agreement for the period of the loan. If you want to move you are also looking to exit the contract. We have a legal right to sue you for any money we lose if you exit the contract.

We reserve the right to let you out of the contract on a case by case basis. If we allow this, it will be on the following conditions:

You have paid all your repayments when due and for the right amount AND

All rates, charges and taxes on the property are paid to date AND

You sign the necessary legal documentation to cancel the caveat on the property and relinquish your interest AND

When you leave, the house is clean, with any damage that you may have caused repaired.

If you have met these conditions and want to move into another house that we own (or buy for you) then we will consider transferring any equity in your existing house to the new house.

Can I Put A Tenant In The House? (IC, RTO)

Yes, but only if you have made this possibility known to us before the initial contract is signed.  We will instruct our legal people to put in clauses allowing this option.  You will be responsible for continuing to make the correct repayments on the due dates.  Be aware that any damage made by the tenant will be your responsibility to fix.

If you do not receive enough money to cover the repayments then you will have to make up the shortfall out of your own pocket.

What Happens If I Die? (IC, RTO, SM)

If you die then your interest in the property passes in accordance with your will.

The person(s) who you nominate as beneficiaries will need to continue making the repayments. Your executor may pay us out or refinance the property.

We recommend you take out a life insurance policy to cover the amount outstanding on the house. Your estate can use that money to pay us out and take clear title to the property.

Can Interest Rates Change? (IC, RTO, SM)

Yes. Interest rates can rise and fall with economic activity. If you are seeking protection from high interest rates then you may like to fix your loan.

We can offer you a fixed loan facility if our lender offers us one. The interest rate will be slightly higher than the variable rate equivalent and you will not be able to make extra repayments.

Who Pays For Repairs And Maintenance? (IC, RTO, SM)

You pay for any repairs or maintenance to the property.  For all intents and purposes, it’s your house.

Who Pays The Rates And Taxes? (IC, RTO)

You pay for any rates and taxes on the property. You also pay the land tax, if any, that we are liable to pay as a result of owning the property.  Rather than you having to deal with infrequent large payments, normally we pay the rates and insurance on the house itself for you, and add it proportionally to your repayments.  (We do charge interest on these amounts, but when you are ahead with these payments this actually reduces the interest you pay on your housing loan)

Can I Make Cosmetic Or Structural Changes To The House? (IC, RTO, SM)

Yes. You can do whatever you like provided you comply with all building and council regulations and have our written consent first.

Do I Have To Pay Any Stamp Duty On My Purchase? (IC, RTO, SM)

Yes. You will need to pay stamp duty (now called "Transfer Duty") before occupation day.  The exact amount will depend on the price of the house, and your circumstances.  e.g. At the time of writing, a first home buyer purchasing a house under $500,000 gets a concession equal to the duty and so pays nothing.  The rules are explained on the state government websites. E.g. see "Concessions for First Homes" on the Queensland Government site. There's now an Eligibility Tester available. (SM only): Other states, please see your own state's website.

What other charges might I be up for? (IC)

Normally, the only other charge besides Stamp Duty would be the cost of having the Instalment Contract created ($990 inc GST) and the normal expenses associated with moving (e.g. power, telephone)  You may find it an eye opener to read an article published in the Sunday Mail that details some of the charges that home buyers are often unaware of, but which are included in the price of the house when you purchase in this way from Fair Go Homes.

Do I Need Separate Legal Advice? (IC, RTO, SM)

Yes. Before you sign the contract we require you to have independent legal advice so that you are aware of all the terms and conditions under the sale contract. You should expect to pay about $500 plus searches.

Am I Eligible For The $7,000 First Home Owners Grant? (IC, RTO, SM)

We suggest you call the State Revenue Office to see if you are eligible.

QLD:                 1300 300 118

You can learn more about this on the Queensland Government site. You can can download and read the forms needed.  For an IC, this is not necessary until the 12 months is nearly up (see next question).  For a RTO this would be at the end of the RTO term.  For a SM this is available at time of purchase if you qualify for the grant. Information for States other than Queensland

What Happens To My 7,000 First Home Owners Grant? (IC)

On the application form you simply nominate the mortgage bank account as the account that the grant is paid into.  (IC only): On an instalment contract, it will be paid by the government when you have lived in the home for 12 months, and at that time will reduce the amount of your loan.  There will be no reduction in payment amounts, but there will be a corresponding substantial reduction to the loan period, and an increase in your equity.

Will There Be a Credit Check? (IC, RTO, SM)

Yes.  Although our lending criteria are different from a bank, we do like to know a little about the financial and rental history of someone to whom we will be lending tens of thousands of dollars.  You will be asked request from Veda Advantage (by phone on 1300 762 207, or online) to apply for a copy of your personal Credit File to be faxed to 1300 727 131.  They have a charge of $36.95 which you can pay by Credit Card on the phone or online.  We will keep your Personal Credit File strictly confidential, and return it to you for your interest.  When you apply online you will be given an opportunity to click through to the Veda Advantage website and request your Personal Credit File online if you prefer.

Where can I buy a house? (IC)

We buy houses in the area from Townsville to Cairns, Queensland, Australia. We may consider other locations in Queensland. At this time we can not consider houses in any other country or state for IC.

Where can I buy a house? (SM)

Anywhere in Australia.  The vendor has to agree to vendor terms for the non-lender portion of the purchase price.  If it is a house we own or where we have a Joint Venture agreement in place with the owner, this is no problem.  Otherwise we need to approach the vendor on your behalf and see if they will agree to these terms.

Click Here to Begin Application

How do I go about this?

Currently Available Properties

1. See How It Works

2. Read the Frequently Asked Questions to make sure you understand the details

3. Apply to be considered to buy a house with FGH

4 . Obtain your Personal Credit File and have it faxed to us

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