How does seller financing work?

Direct answer

Seller acts as the bank: down payment + promissory note + mortgage filed of record.

Expanded explanation

Useful when traditional financing is unavailable or expensive. Negotiate rate, term, amortization, balloon, and prepayment terms. Most common with owners holding free-and-clear properties.

Examples

• $200k purchase, $20k down, $180k note at 6% 30/5 (5-yr balloon).

More Financing questions

• What's the difference between a DSCR loan and a conventional loan?
• Conventional vs DSCR loan — which to choose?
• When does hard money make sense?
• When should I use a portfolio lender?
• How do I negotiate seller financing?
• What is DSCR and what's a good ratio?