Posted by KC Questions on April 19, 2002 at 16:36:11:
If you are getting 65% from the HML, that would leave 35% that the seller will be carrying. You will have to determine both your and the seller’s needs. If the seller needs to be paid off in 5 years, a balloon payment would solve that, but as a buyer I would want the longest term possible. I try to get terms of 20-30 years on my notes to keep my payments low. If the seller insists on a particular interest rate, and the numbers still worked out, I wouldn’t pass up a great deal for that reason alone. I figure that you could always refinance later, which you would have to do to pay off the HML anyway. If the seller insists on you naming a rate, I would grab a newspaper and show him/her what “normal” lenders charge for interest.