How to structure monthly payments before a balloon payment
I am closing a seller financing deal but am confused with how monthly payments are split up between principal and interest. How do I determine how much principal is owed at the 10 year mark for the balloon payment? I have looked at amortization tables but the payments seem to be almost 75% interest in the first 10 years. Is there a good way to structure the agreement?
The terms are below:
Sale Price: $230,000
- Down Payment: $5,000
- Loan Amount: $225,000
- Interest Rate: 3.75%
- Loan Term: 40 years (480 months)
- Interest-only for the first 1.5 years
-Year 10 ballon payment due: X (Refi Loan with bank)