Seller Financing Calculator & Guide
Understand how owner financing works and calculate your potential payments directly with the seller.
Loan Details
Monthly Payment
$2,641.55
Loan Amount
$360,000
Total Interest
$590,959
How Does Seller Financing Work?
Seller financing (also known as owner financing) occurs when the person selling the home provides a loan to the buyer, instead of the buyer getting a traditional mortgage from a bank.
Why Use Seller Financing?
For Buyers
- Easier qualification (no strict bank rules)
- Faster closing process
- Lower closing costs
- Flexible down payment options
For Sellers
- Sell the property "as-is" more easily
- Earn interest income over time
- Potentially higher sales price
- Spread out capital gains tax
Common Terms in Owner Financing
In a typical seller-financed deal, you'll see terms that look a bit different from a bank loan:
- Promissory Note: The legal document where you promise to pay the seller back.
- Balloon Payment: Many seller loans are short-term (e.g., 5 years) with a large "balloon" payment due at the end, requiring you to refinance or sell.
- Higher Interest Rates: Sellers often charge 1-3% more than current bank rates to compensate for the higher risk.