Boiler Plate Form for Owner financing?

Question

HI,
I'm under a bit of time pressure on this, so I'll ask without thoroughly searching the forums first - apologies if this has been dealt with previously!

I have a property under contract but loan approval is dicey (I'll share the story some other time - basically, I have a bit of a "disagreement" with the lender).  I have spoken with the seller and he is willing to take back a note for 90K (purchase price is 121K).  This is FSBO and no realtor involved.  I have never done owner financed deals, so I don't really know what to offer and what paperwork I'll need.  I was thinking that I would offer a 30year amortization schedule with a 5 year balloon payment.  5% interest.  Is this reasonable?  I think the seller will take that.
Is there a standard contract I can access or do I need to get the lawyer to draw one up?
Also, I was thinking about offering to pay for a mortgage service company but realized that they charge up to 0.5% (of outstanding principal).  I think the seller would be fine without the mortgage service company - is there any reason then for me to spend the money?
Thanks much for ANY feedback - again, I don't usually like to rush my learning but I may have to make an exception for this one.

Sharon Tzib · Answer

Just use your state's standard purchase agreement, and in the financing area, insert the terms you have agreed to. Basically, the seller is the lender in an owner finance deal - no need for a special contract.

I would not bring up a mortgage servicing company as the buyer - that's the seller's job to request, since it benefits them (making sure you pay on time and being notified if you don't).

Good luck!