Seller Financing Help

[Darwin Liu]

Hey Guys,

I'm a newbie to seller/owner financing and was wondering if you can help me figure out exactly what I'm in for.

I'm in talks with some guy where he said the property is about $300,000 and he has $50,000 equity in it.  I can do the sale with owner financing with the terms below:

$1000 earnest money

$4000 binder agreement deposit

$25000 at closing

then you assume the monthly payments[about $1770 ..this includes mortgage,insurance and taxes] and responsibilities . 5 years to balloon payment [payoff].

My question is this:

1)The above 30k(closing,binder,earnest) all goes towards the owner and basically disappears correct?

2)Does this also mean I gained about 20k on the sale? 50k in the house, 30k paid out.

3)The monthly payment goes towards the mortgage  the owner has on the house. Can I refinance this before the 5 year balloon or is this something I have to strike up with the owner?

4)Am I missing anything that I should be pointing out?

Thanks in advance!!!