Posted by John Behle on February 04, 2000 at 19:55:31:
Any length you want. Seller financing is the same way. You create a note with the seller upon any terms and amounts that the two of you agree on.
The length can be a few months to 50 years. Amounts and terms can be anything. For example, there is the 5/10/15 note. Five years no interest or payments. Then ten years of interest only payments. Then Fifteen years of amortized payments.
You can have variable interest rates - 5% the first year, 6% the second year, 7% the third year, etc. Or… it can be based on an index of some kind like other variable rate loans.
There can be variable payments. An example is “seasonal” payments on a motel or resort property. Payments are lower during low cash flow times and higher during higher cash flow months.
That’s a short answer to a long question, but the simplest answer is “any way you want it to look.” If you could get a seller to agree to “A dollar a month for the rest of your life” that would be fine.
For more details on the creation of notes, see JP Vaughan’s excellent article in the articles section about creating notes at: