Seller financing wizards, I need some aid!

[Erik Sanders]

Hey BP Community!

I found an incredible deal (a bit out of my price range) but trying to ask HOW CAN instead of can't.  

With some finesse, I got the seller to agree on some creative financing. I so have some questions on how a partial seller carried contract is structured through Title and with a loan legally. Here is the situation:
-Asking price was $1.55M, negotiated him down to $1.4M total
-Financing is through a DSCR loan at 15% down (for an Airbnb)
*my problem is that I only have enough funding for a purchase price of around $1.1M, so I got the seller to agree to carry a contract for the remaining $300k at 10% APY interest only payments until we refinance.

Final terms:Total cost $1.4M (loan for $1.1M and $300k carried by seller)

Questions: Do I need to mention to the bank that the seller is carrying a partial contract? Or would they only need to know that the seller agrees to a purchase price of $1.1M? I do plan to have a PSA with the seller privately with the carried contract terms for the remaining $300k.

Secondly, how would this work through title recording? Does the seller need to get placed as a second lean on the property and be listed on the deed?

Any professional insight would be great here! Home is in Phoenix (85020) for reference!

Thank you all!

[Wayne Brooks]

@Erik Sanders Just ask your lender....they will require you to show that you have your down payment, at least.  They may require proof of where it came from also.  They may or may not allow the seller carried second for the down payment.