Owner Financing Deal Analysis

[Mike Cartmell]

Hey All,
I have a potential buyer that is interested in purchase the property with owner financing. He has 100k to put down but would like me to finance the rest. I have an existing mortgage on the property.

1st Mortgage: Balance of $147,000; PITI Payment of $1043.14 @ 6%
2nd Mortgage: Balance of $20,000; Payment of $220.68 @ 8.45%

The property is listed at $215,000 now. Should I do this deal. Below are some questions I have:

1. I was intending to take the down payment and payoff the 2nd note. Should I refinance the first at today's rates?
2.What interest rate & term should I charge him? I was thinking 9% for 30 years with a 5 year balloon.
3. What are you general thoughts on this deal, any advice is greatly appreciated.

Thanks,
Mike