Seller Financing for down payment?
So I know that you can do this, but I'm curious as to how.
If I wanted to buy a house, but didn't want to tie my money up in it so I wanted to ask the seller to finance the down payment, then how would I do this?
For example, if I had a $100k house I wanted to buy with a traditional mortgage with 20% down, but I didn't want to put my own money in it.
So I ask the seller to pay the down payment of $20k, and I'd repay them at 10% interest for to be paid off in 5 years.
First, is this realistic to ask for something like this from a seller? Would a mortgage lender be ok with me doing this?
Also, what would the order of payments be? Here's what I assume: the lender gives the seller $80k and thats it. Then I just pay the seller the monthly payment for the next 5 years on that $20k.
So in the end, I'd come out with two loans, a 30 year loan for $80k at the mortgage interest rate and a 5 year loan for $20k at the 10% negotiated rate.
My second part of the question is where does the risk fall? If I am unable to pay the payments, I would think that the mortgage lender has the right to forclose on the house. But what right does the seller who financed $20k have if I was not able to pay? Is that just the risk the seller is taking? Or would they have a claim to anything if I stopped paying the loan back?
Or on the flip side, if I wanted to pay the $20k early, would that be ok in an average deal like this?
A final part of my question, how would one ho about doing this deal? Would a real estate attorney be able to take care of all of this, are there agencies specific to this type of work?