Need help understanding seller financing terms

3 Replies

Im working on negotiating a deal and the seller offered the following terms. I need help understanding exactly how this would work out:

"Balance between your cash and agreed upon price would be financed at 7.5% with payments of $300 a month."

Is that 7.5% +300 per month or 300 per month for the duration of the loan with 7.5% per year?

Originally posted by @Anthony O. :

Im working on negotiating a deal and the seller offered the following terms. I need help understanding exactly how this would work out:

"Balance between your cash and agreed upon price would be financed at 7.5% with payments of $300 a month."

Is that 7.5% +300 per month or 300 per month for the duration of the loan with 7.5% per year?

 It appears to be saying that the amount financed would be at 7.5% - (when calculated the payment would be $300)

Amount owed $45,000

Interest 7.5%

Term 360 months

Payment $315 per month

You should have the seller explain what he means - in writing

Thankyou Mike, I reached back out to the listing agent and she put me in direct contact with the owner. His understanding what that I was coming to close with a larger down payment than I offered. Misunderstanding between both parties. Thank you for your quick reply.

Originally posted by @Anthony O. :

Thankyou Mike, I reached back out to the listing agent and she put me in direct contact with the owner. His understanding what that I was coming to close with a larger down payment than I offered. Misunderstanding between both parties. Thank you for your quick reply.

 If you're taking 7.5% to rate, I strongly suggest ensuring there is no early payoff or early prepaymetn penalty. That way, as soon as you're able, you can refinance into normal Fannie financing.