Seller Financing structure
Before I start paying my attorney, I would like to hear suggestions from BP members. I'm working with an owner open to seller financing with a 3-year balloon. The details are as follows:
Purchase price $385,000. It has historically been rented for $1,800/month. The mortgage balance is roughly $180,500. Payments are roughly $1,500 including taxes and interest. The home is also collateral for a line-of-credit balance of $62,000, and a current monthly finance charge of $130.
The sellers are not desperate, they got tired of renting so the house has essentially been vacant for the past 3 years aside from it being a guest house for family visiting town. It has never been listed for sale.
This would be my primary residence. I can afford to pay off the mortgage of $180,500 but not the line-of-credit. Would it be wise to try and pay off both or neither? Or just leave the notes in sellers name, take title, and have a loan servicing company take my monthly payment and distribute accordingly?
My fiance will be finishing school and our combined salaries will easily allow us to obtain a note for the full purchase price when the 3-year balloon comes up. I appreciate any input you would like to share.