Seller Financing: Can someone clarify

[Daniel Mendez]

Good morning BP members,

So I am really trying to nail all the details about how seller financing works.

What I am still fuzzy about is:

1. Does the seller work with a third-party mortgage loan company to establish the loan that I have with him/her?

2. Do I work with a title company at all during the process?

3. Does seller financing only work when the seller owns the property free and clear?

4. Am I responsible for creating a loan amortization schedule to know how much I owe as I continue to do payments?

Thanks in advance!

[Allan Smith]

1. no. While you can use a processing company it's pretty unnecessary.  Just pay seller directly.
2. yes still need title company to make sure title is conveyed completely clear. Title company handles escrow as well. Pretty much the same as any other closing really.
3. when property is not free and clear it gets complicated. You can do a mortgage wrap where mortgage stays, you pay it, and you also pay seller a payment for his equity. This is where a payment processor might be needed. This type of deal can be risky because bank can call loan due since property changes title. Buying subject to is a similar arrangement 
4. you would probably have the schedule to make it easier on seller.