Loan Questions for a Seller Financed Loan

[Jason Sullivan]

I'm new to this so please bear with me. If I was interested in purchasing a seller financed home with the total price of say $700,000, could the loan be structured to pay off say $150,000 to the seller over a 4-year period with the remaining due after that period? For example, I would need a new loan from a bank for the remaining $550,000 after the 4 years or would refinance the house for the $550,000, correct? This is assuming the house is paid off prior. 

The idea here is to pay off the principal of the $700,000 over the four period then when I get a loan for the remainder $550,000 it would be more affordable. Thanks in advance!

[Jason Sullivan]

Thanks for the detailed response! The state is California. These are some ballpark numbers, but I was thinking around 5 percent interest rate. So, if my math is correct, that would be $3,454 payment a month. 

The reason I'm looking away from traditional financing is to achieve a lower monthly payment. The seller is in a unique situation and may be willing to work a deal with me that would help me make this possible. In my mind, if I can lower the 2nd loan amount by paying down the principal in the first 4 years, it would be a more affordable payment. Albeit it would take me four extra years to pay off the house.