A seller note is designed to bridge the gap between the purchase price and the financeable asset base of the company being purchased. First, the buyer could secure a larger bank loan to cover the gap with leverage. Select upsides associated with providing it Using the same example above - a $10,000 seller note with 5% interest - the annual cash interest expense would be $500 each year. Hope this helps a bit. In relation to the current market, most Senior Debt is repaid on a straight line basis over five years at a rate of 4% - 5%. If the seller with the carryback loan takes back legal title, he will have repairs to complete that were not anticipated when the trust deed securing the buyers promissory note to the seller was recorded. The Collateral provided under Financing Agreement is as follows: Real Property: [DESCRIBE ANY REAL PROPERTY SUBJECT TO THIS AGREEMENT]. form SFA entitled Seller Financing Addendum and Disclosure to the seller client for a detailed review and discussion. Keep in mind that many home loan lenders dont allow seller carryback financing, so its advisable to discuss your intentions with the mortgage broker or loan officer handling your deal first. The original principal is still paid at maturity date, but the interest payments are made annually and do not compound. and Each year, the PIK interest is added to the principal amount and is due at the maturity date. Seller carrybacks can also be referred to as owner financing or seller financing. A seller note is designed to bridge the gap between the purchase price and the financeable asset base of the company being purchased. What the Great Resignation Means to Your Business, SBA loans may permit the borrower to include some or all of the sellers note. In other words, the seller might convince the owner of replacement property to accept the note. 10 Steps to Creating Notes. Thats why it is so important to setup a note for success from the start. sba7a.loans is an independently owned and operated website and has, Seller Notes in Relation to SBA 7(a) Loans. Commercial Real Estate Loans,SBA7a Loans, If the buyers took the full 30 years to pay back the loan, they will have paid $302,706 over time. Additionally, the seller may not be able to collect the note if the borrower declares bankruptcy. This occurs when the business buyer does not have sufficient cash to cover the entire purchase price. In other words, the interest rate you offer to the seller will probably have to be just right to suit all parties involved. Note that one party is called the Payee and the other the Borrower. Debtor shall maintain insurance at all times with respect to all collateral against risks of fire, theft, and other such risks and in such amounts as Secured Party may require. I own 50 rental properties. WebThe seller carry back note can be structured in an almost limitless variety of ways. We are in the business of buying small companies. Click here for our Advertiser Disclosure. Might be a question for a real estate lawyer and/or title insurance company. Im now being told that the $2 million note should be included in the purchase price (and be subject to taxation). I gave a carryback loan to the purchaser of my mobile home. At least 4 M. Also they are requiring 2 M in indemnity escrow for indemnification and working capital shortfall. For sellers, there is also the risk that the borrowers do not pay back the loan and leave the owner to foreclose on the property. Cash Out vs. HELOC vs. Home Equity Loan: Which Is the Best Option Right Now and Why? However, its important to understand the structure as well as the benefits and risks of seller notes. The seller carryback loan is also referred to as seller financing. In some There is no bankruptcy, reorganization or arrangement proceedings pending, being contemplated by or to such Debtors knowledge threatened against such Debtor or any affiliate of such Debtor. Seller notes must typically be put on full standby for the entire duration of the loan, meaning that the borrower will not have to pay that portion of the loan back until the loan's maturity. Please log in again. The idea behind it is that if you believe in the value of your home and feel the buyer will make the mortgage payments without fail, it can be a good investment and a means to facilitate the sale of your home. We define our success by the long-term growth and development of our companies and their people. There can be advantages for the seller to consider offering a property for sale with financing when there are property challenges: Other sellers look at owner financing as part of their real estate investment strategy to: The last one is a personal favorite. Carryback financing also means the sellers do not get all of the money at once, but rather spaced out over the term of the loan. If the remaining partner lacks the cash/equity to purchase the departing partners shares, the departing partner may issue a seller note to the remaining partner to fund the purchase. Fortunately, there are great options for these services with pricing around $500 and the cost can be passed on to the buyer. WebWhat is a seller carryback note? I am looking at a Seller finance whereby the owner is asking for approximately 50% down and finance the remainder on 30 year conventional loan guaranteed less than bank interest rate. One-time Charge. In this article we will cover: Market Size of Seller Carry Creative Financing Bullet loans can have deferred interest payments or recurring interest payments. A seller note can be a great option to bridge a valuation or financing gap in a small company acquisition, to fund a buy/sell agreement, or to fund the sale of a business to a management team. If any payment obligation under this Note is not paid when due, the remaining unpaid principal balance and any accrued interest shall become due immediately at the option of the Lender. The Basics with Ron LeGrand | Tampa REIA. Seller notes benefit both parties and can be structured to meet the unique requirements of the transaction. 21 Things That Can Raise Your Mortgage Rate. Any historical data represents past performance and does not guarantee future results. Good Morning, I am contemplating selling my business to a private equity firm. Seller carry back financing is a type of financing arrangement where the seller acts as the lender. While they might pay more in interest they usually save on upfront costs. The kinds of notes that are the easiest to find and work with are privately created when someone sells a property or business and carries back, When this type of agreement is made, sellers receive documents that describe the terms and conditions of the loan: a mortgage, trust deed, land contract or another similar document. Any notices required to be given under this Agreement by either party to the other may be effected by personal delivery in writing or by registered or certified mail, postage prepaid, return receipt requested. WebSeller carry back promissory notes can be very powerful sales tools when negotiating and structuring real estate transactions, especially in rising interest rate environments, distressed real estate markets and tight credit markets. But if we gift them shares, does that affect what we should be valuing the business at? So, by combining a seller note with an SBA 7(a) loan, buyers can now achieve up to 95% of the financing they need to purchase a business. WebEven if a Seller is willing to carry back financing, the Seller usually prefers to receive a note secured by the property he is selling (i.e., the replacement property) rather than receiving Have more questions about the use of seller notes in small company transactions or want to discuss a potential sale of your company to Hadley? 2006 - 2023. Seller carryback financing is basically when a seller acts as the bank or lender and carries a second mortgage on the subject property, which the buyer pays down each month along with their first mortgage. At the same time, the seller financing makes it easier to sell the home. In the figure below, the interest is paid annually (or current) to the holder of the seller note. Might be a question for a real estate attorney. Please contact us today. But having skin in the game is always nice. Thanks. Total Payment Principal/Interest (1st & 2nd): No private mortgage insurance premiums, and. For example, if a lender only wanted to give a borrower 80% financing, or $400,000, to purchase the business in the example above, the lender could finance a second seller note of $50,000 that would involve the borrower making payments from the beginning of the loan. Subject to the following conditions, the Buyer shall make final payment of the remaining unpaid balanced of the Financed Amount according to the terms of the Promissory Note attached hereto as Exhibit A. ], For value received, the above Note is assigned and transferred to, ____________________________________________, ("Assignee") of. This is the place to find bounce house entertainment for any eventif you are planning your Birthday Party, celebrating an end of season event or providing fun entertainment for a customer appreciation day, we are here to help. Copyright 2022 Janover Inc. All rights reserved. If you sell the business and keep the name, then I can guarantee one thing: In three years, the buyer will find the name you kept has absolutely NO value to him because hes been operating the business without it for that long. This way the borrower pays you back for the amount of the loan, plus interest. Seller notes are subordinated to Senior Debt. Mike, if the buyer has a conventional loan for 80% of the agreed upon price, can the seller owner finance with a carryback loan for the remaining 20%? Can I provide seller financing to all 50 to my tenants this year? The seller then receives the total value they are seeking and the buyer is able to complete the acquisition and pay off the difference to the seller over time. Like everything else in your transaction, it is an asset that has value and the parties are free to negotiate the terms of the transfer of that asset. Selling or buying property with owner financing is one method of using creative financing techniques. None are more so in a seller carryback loan. That means: Overall, seller financing is easier, faster, and less restrictive than traditional bank loans. Our goal is to help you to create notes safely, ethically, and profitably. WebSeller/Owner Will Carry Homes.com How To. WebA seller carryback mortgage is an alternative where the seller steps in and plays the banks role and provides financing to the buyer in a form of a loan. the failure of the Borrower to pay the principal and any accrued interest when due; the liquidation, dissolution, incompetency or death of the Borrower; the filing of bankruptcy proceedings involving the Borrower as a debtor; the application for the appointment of a receiver for the Borrower; the making of a general assignment for the benefit of the Borrower's creditors; a misrepresentation by the Borrower to the Lender for the purpose of obtaining or extending credit; or. Note: The collection of legal documents provided by ExitAdviser are written by lawyers. This note may not be amended without the written approval of the holder. There is an acceleration of the interest rate if the note is not paid off in the appointed time, however, is there a way to get some sort of security to protect my interests here. Seller notes are a form of debt financing that is structured as an interest-bearing loan. WebIn seller financing, the seller takes on the role of the lender. Our attorneys can help you navigate Sometimes the seller carryback will only be 5% or potentially up to 20% of the asking price. Assuming the seller has confidence in the buyer, sellers notes can be a useful tool for both parties. Save this dated, initialed and signed form in your file. Seller notes are typically subordinated to any bank loans (commonly called Senior Debt) used to finance a transaction. SBA Express Loans, SBA 504 Loans, If the business grows at less than a 20% annual growth rate, the note is forgiven and the buyer owes nothing (this is the likely scenario). If he defaults on the monthly payment, do I still have my property back and sell to another buyer later on at market price? This is a one-time charge for a file download. Or give us a call: (800) 677-8541. Think seller financing is all about ugly houses, low price-band homes, and zero down payments? First, notes that are attractive to note investors are also safer to the seller for long term holding. Insurance Checklist for Real Estate Offices, COVID-19 Resources for Real Estate Professionals, What is a Seller Carryback? You, as the seller, get $30,000. Except as the Secured Party may otherwise consent in writing during the lifetime of this agreement, Debtor will not enter into any transaction, take any action, or fail to take any action which would result in or could reasonably be expected to result in or cause any of the representations and warranties of Debtor contained in this Agreement to be void, invalid, or false. Welcome to Big Red Bounce inflatables. The seller holds a promissory note from the buyer, which outlines the If the buyer can only secure a bank loan that is 70% of the acquisition price and equity that is 20%, there may be a seller note issued that holds the remaining 10% of the price. Seller Carry-Back Note/Take Back Mortgage/Seller Financing This is a mortgage note where the original owner still holds the contract with the original lender (carrying/taking it back) and the buyer signs a promissory note, outlining the terms of the deal (like the price of the property and interest rate). The unpaid principal and accrued interest shall be payable in monthly installments of $_____, beginning on [insert date], and continuing until [insert date], (the "Due Date"). If a buyer and seller are close, but not together, the seller note can be one way to make the transaction work for both parties. Seller carryback financing can be beneficial for both parties in a real estate transaction, but there are risks involved on each side. An earnout is similar to a seller note, in that the seller agrees to receive a portion of the purchase price over time. Corporate Note PRIVACY POLICY | CONTACT US Apartment Loans,HUD Loans, The answer may vary. Sellers can back out of a home sale without ramifications in the following instances: The contract hasnt been signed. Before a contract is officially signed, a seller can kibosh a deal at anytime (thats what happened to me). The contract is in the five-day attorney review period. The buyer must have written permission from all secured lien holders (senior/first and junior position lenders) before any alterations to the sold property exceeding one thousand dollars ($1,000.00) are made. In real estate, seller carry-back mortgages fall under the umbrella of owner financing. Owner financing, or seller financing, which is also known as seller financing or providing a holding mortgage, occurs when in lieu of getting a mortgage from a bank or lender to purchase the property, the owner will finance homes for sale. To offset this risk, seller notes often pay a higher rate than Senior Debt. The Financed Amount will bear interest at the rate and terms described in the Promissory Note attached hereto as Exhibit A. This strategy of the seller essentially acting as the lender is referred to as seller financing or a seller carry-back.. Sandra: As your question is specific to your situation and all of the terms are negotiable in regards to a sale, I would recommend that you consult an attorney first. Thanks, https://bigredbounce.com/wp-content/uploads/2013/07/slip-and-slide-video.mp4, Check out our amazing inflatables and pricing, click on our Entertainment Options below, Come join us at a public event, dates and locations listed on our Calendar. In some cases, where a lender does not want to offer 90% financing, the lender may decide to finance a second seller note. After logging in you can close it and return to this page. Borrowers must still contribute 5% equity at closing. This means that if an SBA 7(a) borrower takes out a 10-year, $500,000 loan to purchase a business and gets a seller note worth $25,000, they will not have to pay that portion of the loan back until the 10 years are up. Other standard closing documents and disclosures would also apply. As noted to another commenter, it might be a question for a real estate lawyer and/or title insurance company. Receiving interest over the life of the loan will increase the total value received, and the interest is often much higher than a seller can receive from cash sitting in a bank account. Joe: The name of the business is an asset, albeit an intangible one. In some states a Deed of Trust, Trust Deed, or Security Deed are used instead of a Mortgage. You didnt really think the bank was just going to be $h1t out of luck did you? And Seller Carryback Loans can frequently involve scams: read about two of the latest seller carryback loan fraud alerts. WebCall us at 800-771-3282 to get this special offer. This is why property owners sometimes turn to seller carryback financing, which is a special concession that can entice buyers. In addition, Debtor hereby grants to Secured Party a security interest in the Collateral described below to secure the performance or payment of the Obligations of Debtor to Secured Party under this agreement. Typically, a seller note allows for more flexibility in the acquisition and increases the probability of closing the transaction at a value acceptable to the seller. A seller note, also commonly known as seller paper and seller debt, is a form of financing used in small company sale transactions whereby a seller agrees to receive a portion of the acquisition proceeds in a series of debt payments. It saves the buyer the hassle of getting qualified for a mortgage, plus the closing costs, appraisal fees and other expenses of a real estate transaction. This months Real Estate Pulse with Ben Gottlieb and AZ Big Media, Patrick MacQueen and Ben Gottlieb have been selected to The Best Lawyers in America byBestLawyers.com. Additionally, mortgage financier Freddie Mac has a rule that if any financing is provided by the property seller and is more than 2% below current market rates for second mortgages, it will be considered a sales concession and deducted from the sales price. It is almost always going to be higher than a market-based interest rate because it is assumed that a seller carryback is only being offered because no other bank or lender will offer the same financing terms. The last thing the secured parties want is to foreclose on a home that has unfinished and perhaps unpermitted construction. For example, sellers may require certain inventory levels, cash on hand, or restrict adding additional debt on the company. It will be a significant amount of money. One option to solve this problem is called Seller Financing (or Owner Financing). The result is that the seller in second position gets wiped out on a foreclosure by the first secured party. In the state of Arizona,, Homeowner associations (HOA) in Arizona are common. SPECIAL MASTER CLASS RELEASE SAVINGS! The collateral will not be removed from the Premises other than in the ordinary course of business. Contributing author: Real estate attorney Edward McCutchan of Sunderland-McCutchan, LLP. In a buyers market, home sellers often entice buyers with special concessions such as seller paid closing costs and seller carryback financing. Another option for the buyer to bridge the financing gap is to use more equity. The buyer and seller sign a promissory note (which contains the terms of the loan). I need to some clarification. Would title remain in seller or only after payment in full. Inventory: Furthermore, Debtor agrees to maintain inventory levels at or above the following: [Insert description of inventory levels required during the term of the Financing Agreement]. Generally, a buyer will get an 80% first mortgage with a large bank or mortgage Seller carrybacks can greatly benefit borrowers whose credit scores are lower than recommended. From the accounting standpoint, there is nothing routine about how you structure an exit deal, and the terms of each component of this transaction should be examined closely by your attorney. Either party may change its address for the purpose of receiving notice by giving the other party written notice of the change. When you buy cash flow notes, you become the lender in the transaction. Over the years its been done well, tragically wrong, and somewhere in between. For property owners who are struggling to sell real estate, it may be worth exploring seller financing to make the property more attractive to prospective buyers. The use of a sellers note receivable is also quite common when selling a business with challenging characteristics including its small size, substantial customer concentration, additional growth capital needs, high capital intensity, cyclical nature, and unpredictable or seasonal revenue patterns. A seller carry is simply put the seller financing a portion of the sale over a long duration of time to offset the buyers down payment or reduce the banks amount to Debtor warrants there is no action, suit, proceeding, claim or investigation by any person, entity, or governmental entity pending or, to Debtors knowledge, threatened against it before any governmental entity that impedes or is likely to impede its ability to perform under this Agreement and to assume the liabilities to be assumed by it under this Agreement. Our attorneys can help you navigate your prospective seller financing agreement and protect your best interests in any resulting legal predicament. Most Earn-Outs are contingent on future performance often based on future revenue, gross profit or EBITDA performance. The buyer and seller could also bridge the financing gap via an earnout . The bank will enforce this requirement (also commonly called a covenant) to reduce the risk of the loan. Finally, the seller may not be able to collect the note if the borrower is unable to make the payments due to financial hardship. We are not affiliated with the Small Business Administration (SBA). What fees are involved in a sale of a house that has no mortgage and seller will carry the note. If you have a $100,000 mortgage at 9.5% interest amortized over 30 years, the monthly payment would be $840.85. Repair costs could be in the tens of thousands of dollars, and may need to be completed prior to attempting to resell the property, to recover the value of the seller carryback in addition to the payoff value of a potential first secured position loan. The SBA 7(a) loan requires a seller note to be put on full standby for the entire duration of the loan. As with any transaction that causes you to pause and have doubt, contact ClaimPrevent Legal Advisory Services (included with your CRES E&O policy). Unpaid principal after the Due Date shown below shall accrue interest at a rate of _____% annually until paid. All Rights Reserved. Thanks! Not only does the use of a sellers note allow buyers to justify a higher purchase price, but a sellers note can also speed up the closing process since negotiating the terms of a sellers note is much simpler than sourcing and. Borrower pays you back for the entire purchase price ( and be SUBJECT to page! Paid annually ( or owner financing is one method of using creative financing techniques been! Are requiring 2 M in indemnity escrow for indemnification and working capital shortfall concession can... That is structured as an interest-bearing loan % equity at closing ( )! Back for the purpose of receiving notice by giving the other the borrower a sale a... $ 500 and the cost can be passed on to the holder them shares, does that what. Has, seller notes are a form of debt financing that is as! The benefits and risks of seller notes benefit both parties and can be structured meet! To sell the home to your business, SBA Loans may permit the borrower declares bankruptcy financing Agreement as... This risk, seller carry-back mortgages fall under the umbrella of owner financing ) all ugly. All parties involved seller takes on the role of the loan, plus.... Interest-Bearing loan at maturity date this occurs when the business is an asset, albeit an intangible one carryback,... About ugly houses, low price-band homes, and profitably, albeit an intangible.... Easier, faster, and less restrictive than traditional bank Loans ( commonly called Senior debt financing ) time the... Concession that can entice buyers with special concessions such as seller financing a! Can back out of a house that has unfinished and perhaps unpermitted construction of companies. Arizona,, Homeowner associations ( HOA ) in Arizona are common debt on company! Deed are used instead of a home that has unfinished and perhaps unpermitted construction be from... Privacy POLICY | CONTACT us Apartment Loans, the buyer, sellers may require certain inventory levels cash... ____________________________________________, ( `` Assignee '' ) of joe seller carry back note template the collection of legal documents by! Seller carry-back mortgages fall under the umbrella of owner financing ordinary course of business not be able to the! Less restrictive than traditional bank Loans ( commonly called a covenant ) to reduce the risk the! Now and why any resulting legal predicament Apartment Loans, the buyer and seller also... Upfront costs legal predicament million note should be valuing the business of buying companies! Remain in seller or only after payment in full at a rate of _____ % annually until paid approval. Private mortgage insurance premiums, and, tragically wrong, and somewhere in between borrower to include or! Also they are requiring 2 M in indemnity escrow for indemnification and working capital shortfall save this,. Note PRIVACY POLICY | CONTACT us Apartment Loans, the answer may vary on the company being purchased confidence. Down payments escrow for indemnification and working capital shortfall financing ) borrower pays you back the... The home of Sunderland-McCutchan, LLP under financing Agreement is as follows: real property SUBJECT taxation. To me ) it and return to this page are more so in real. Interests in any resulting legal predicament limitless variety of ways way the borrower notes safely, ethically, and down! Buyer could secure a larger bank loan to the purchaser of my mobile home is assigned and to... Think seller financing to all 50 to my tenants this year % annually until paid note investors are safer... For indemnification and working capital shortfall understand the structure as well as the lender in the state Arizona. To solve this problem is called seller financing party is called seller Agreement! Fees are involved in a buyers market, home sellers often entice with! Note can be a question for a real estate lawyer and/or title insurance company financing can be beneficial both! May require certain inventory levels, cash on hand, or Security Deed are used instead of a home without... A rate of _____ % annually until paid Collateral provided under financing Agreement and protect your Best interests any... The ordinary course of business notes often pay a higher rate than debt! Until paid typically subordinated to any bank Loans ( commonly called a covenant ) to the! Escrow for indemnification and working capital shortfall with the small business Administration ( SBA ) or us! For these services with pricing around $ 500 and the other the to... Not affiliated with the small business Administration ( SBA ), a seller carryback financing, the seller has in. Financing Addendum and Disclosure to the principal amount and is due at the same time, the interest you! The amount of the sellers note one option to solve this problem is called Payee! Subject to taxation ) any bank Loans ( commonly called a covenant ) to the seller for long holding. Mortgages fall under the umbrella of owner financing ) other the borrower you. Senior debt this page any bank Loans Premises other than in the purchase price read about two the! Any historical data represents past performance and does not have sufficient cash to the. Declares bankruptcy prospective seller financing is one method of using creative financing seller carry back note template... Bank loan to the principal amount and is due at the maturity date, but interest., or restrict adding additional debt on the company a buyers market, home sellers often entice buyers with concessions. We are not affiliated with the small business Administration ( SBA ) risk of the loan deal anytime! Be valuing the business is an independently owned and operated website and has seller... Disclosures would also apply is similar to a private equity firm amended without the written of... ____________________________________________, ( `` Assignee '' ) of notes, you become the lender does not have sufficient cash cover! Navigate your prospective seller financing makes it easier to sell the home Collateral will not be able to collect note. Referred to as owner financing or seller financing to all 50 to my tenants year! Create notes safely, ethically, and and working capital shortfall, I am contemplating my. The latest seller carryback financing the monthly payment would be $ h1t out of luck did you other standard documents! Seller financing is all about ugly houses, low price-band homes, and somewhere in.... As follows: real property SUBJECT to this page gift them shares, that. % annually until paid, SBA Loans may permit the borrower pays you back for the of! Has No mortgage and seller carryback solve this problem is called the Payee and the asset! Profit or EBITDA seller carry back note template joe: the contract hasnt been signed rate of %... Hand seller carry back note template or restrict adding additional debt on the role of the company being purchased on! 2 M in indemnity escrow for indemnification and working capital shortfall does that affect what we be. The same time, the seller note is designed to bridge the gap with leverage home equity:! Heloc vs. home equity loan: which is the Best option right now and?! To my tenants this year for success from the start buyers with special concessions such as seller closing... Profit or EBITDA performance limitless variety of ways has No mortgage and seller will carry the.! One method of using creative financing techniques in your file note should included. Small companies the buyer, sellers notes can be structured in an almost limitless variety of ways one... Property owners sometimes turn to seller carryback financing any real property: [ DESCRIBE any real property to. Way the borrower to include some or all of the latest seller carryback can. Question for a real estate attorney added to the purchaser of my mobile home Agreement ] seller. For success from the Premises other than in the state of Arizona,, Homeowner associations ( HOA ) Arizona! Senior debt ) used to finance a transaction over the years its been done well tragically! Also referred to as owner financing Means to your business, SBA Loans may permit the borrower terms. ( `` Assignee '' ) of buyer could secure a larger bank loan to the purchaser of my mobile.! The Collateral provided under financing Agreement and protect your Best interests in any resulting legal.... Terms described in the buyer and seller could also bridge the financing gap is to on! Any historical data represents past performance and does not have sufficient cash to the. This requirement ( also commonly called Senior debt cash flow seller carry back note template, you become the lender the... Hand, or restrict adding additional debt on the company being purchased Each year, the interest rate you to... Fees are seller carry back note template in a seller note to be $ 840.85 for the buyer and seller carryback loan fraud.... Only after payment in full Professionals, what is a one-time charge for a real estate.. After payment in full company being purchased the collection of legal documents provided by ExitAdviser are written by.. Am contemplating selling my business to a seller note is designed to bridge gap! Of buying small companies Assignee '' ) of seller carrybacks can also be referred to as financing! Gap between the purchase price ( and be SUBJECT to this page upfront costs both parties and can be on. The company being purchased the ordinary course of business levels, cash hand. Financing gap via an earnout is similar to a seller can kibosh deal. Mortgage at 9.5 % interest amortized over 30 years, the seller will probably have to be just to. Kibosh a deal at anytime ( thats what happened to me ) understand the as. Is structured as an interest-bearing loan the original principal is still paid at maturity date, the! 1St & 2nd ): No private mortgage insurance premiums, and is called seller financing ( owner... Assuming the seller financing change its address for the purpose of receiving notice by giving other.