interest on seller financing
Hey guys,
So I am trying to figure out seller financing and interest rates, and I'm having trouble with the interest part. I am not trying to figure out at what rate one should charge or pay interest, but more along the lines of how that interest is accrued.
Is the interest on a seller finance deal typically based on an APR or a flat rate for the amount carried??
example: If I was to purchase a house for $500,000 and the seller carried the whole amount at 10% for 30 years, that would end up equaling a total to the seller of $550,000 to the seller. However, if that was 10% APR the seller would probably almost double their money. I guess no one would pay 10% a year and keep that loan for 30 years tho..
Can you guys help me get this straightened out?
thanks