FAQ
What is a seller financing addendum and how does it work?
A seller financing addendum attaches to a home purchase agreement when the seller agrees to finance part of the sale instead of the buyer using only a bank loan. It spells out the loan amount, interest rate, repayment schedule, and other terms so both parties understand the arrangement.
What terms should a seller financing addendum include?
It should state the financed amount, interest rate, payment schedule, loan term, and whether a balloon payment is due at the end. It also covers default consequences, late fees, and how the security interest is recorded, ensuring the seller and buyer agree on every repayment detail in writing.
What is a balloon payment in a seller financing arrangement?
A balloon payment is a large lump sum due at the end of a seller-financed loan after a period of smaller payments. It lets buyers keep early payments low but requires refinancing or paying the remaining balance when the balloon comes due, so the addendum should state it clearly.
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