Posted by Michael Morrongiello on January 20, 2000 at 16:57:50:
I would call it an “interest only” loan with a balloon payment due at some future maturity date. You would be making payments of JUST interst due on the loan.
eg. $50,000.00 seller take back “interest only” @ 10%
This would be $5,000.00 per year of interest which divided by 12 months in year equates to a monthly “interest only” payment of $416.67. At some future point in time the FULL $50,000.00 principal would have to be repaid.
There really are no “special” forms to use in a contract when declaring a wrap around mortgage, etc. Just make sure you identify the terms of repayment, etc. You might consider using a “seller financing” addendum form that you can obtain from Professional Publishing www.profpub.com