Seller Financing Question

[Neil Robertson]

Seller financing question....

I'm thinking about proposing this to a seller.  Purchase price 600k, I give him 60k for a down payment, then 5k per month for 1 year (60K). 

After 1 year I owe him the rest of the price for the complex $480,000. 

Question 1- when I got to refi out of the seller financing deal into a conventional does the 120K I have in the property (60k down payment and 60K from 1 year of payments) count for the down payment? Do I now own 20% equity in the property? how does this work? I would purchase the property with a conventional loan but I do not have the 120K for the 20%. 

Question 2- During this 1st year term how does one handle the payment system? I've read that an escrow company would help with this. 

Thanks for your help!!!