Seller Financing Calculator

Model seller-carried notes · Compare to conventional · Evaluate balloon payments

Seller Finance Terms

$
%

Typical: 5-20% for seller finance

%

Negotiated with seller

yr

Payment schedule basis (often 30 yr)

Balloon Payment
yr

Remaining balance due in full at this point

Down payment: $25,000
Note amount: $225,000

Conventional Financing Comparison

Compare the seller finance terms against what a conventional lender would offer.

%

Typical: 20-25% for investment

%
yr
%

Typical: 2-4%

Seller Financing: Benefits & Risks

Benefits for Buyers

  • Lower down payment (often 5-15% vs. 20-25% conventional)
  • No bank underwriting or income verification requirements
  • Faster closing (no appraisal required by a lender)
  • Negotiable terms (rate, down payment, balloon timing)
  • Lower or no closing costs
  • Possible below-market interest rate

Risks to Understand

  • Balloon payments create refinance risk (what if you cannot refi at maturity?)
  • Due-on-sale clause risk if seller has an existing mortgage
  • Dodd-Frank rules limit seller finance for owner-occupied properties (1-3 per year for non-licensed originators)
  • Seller may not properly release lien — use a title company and attorney
  • Shorter terms mean you must refinance or sell before balloon date
  • Seller carries default risk — they may have less recourse than a bank

Legal Considerations

  • Always use a real estate attorney to draft the promissory note and deed of trust/mortgage
  • Record the deed of trust/mortgage with the county to protect both parties
  • Use a loan servicing company (e.g., FCI Lender Services) to collect payments and provide tax documents
  • Get title insurance even on seller-financed deals
  • Verify the seller owns the property free and clear, or that their lender's due-on-sale clause is understood

Seller Finance Results

Monthly Payment (Seller Note)

$1,348.99

on $225,000 at 6% / 30 yr amortization

Balloon Due: Year 5

$209,372

Remaining balance must be refinanced or paid in full

Seller Finance Summary

Cash Needed to Close$25,000
Note Amount$225,000
Interest Paid Before Balloon$65,312
Total Interest (Full Amortization)$260,636

vs. Conventional Financing

Conventional Cash to Close$68,125
Conventional Monthly Payment$1,279.08
Conventional Total Interest$272,969

Monthly Savings

-$69.91

vs. conventional

Less Cash to Close

+$43,125

vs. conventional

Seller financing saves you $43,125 upfront vs. conventional. You need only $25,000 to close. Plan your exit: the $209,372 balloon is due in 5 years.

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