What are some fair owner financing options

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Hi, 

I'm currently attempting to get lender financing on a property at 3.5%, 5% down, 20 year mortgage @95k. In the event the bank denies me the loan, (if it doesn't come back appraised at 100k, etc.) owner financing has been verbally agreed upon. 

Do these terms below sound fair for my situation? I think they do but am attempting to do my reaserch. I am going to be adding an addendum to the current contract that stipulates owner financing in the event bank/lender financing falls through and am trying to figure out what to put in the contract. 

Below is what was proposed by seller:

-Selling Price: $100,000.
-A period of 10 years amortized, with Interest Rate of 6%

or

Interest Only for 5 years at 5%. This would give you time to get your own financing -- and see what the market is doing.
You would provide insurance coverage, per normal levels.
Any major changes to the property would have to be approved by me.
Any early payoff of either option would include a monetary penalty.

Thanks!