Seller Financing Deal Analysis

[Lesley Ray]

Background: house is in a decent neighborhood outside Cleveland, OH. Purchased for $9k and seller put in $50k of renovations.

Buyer to pay $4000 toward commission at lease signing and seller to pay remaining commission plus seller agent fee

Sale price of $72,000… Lease payment to be $685 month.

Lease payment to have principle reduction as if we had a note for $72,000 for 420 months @ 7.5% . $5000 down after 6 months and we will create a note and mortgage for $66,809 for 414 months.

What we are doing is giving credit for the principle reduction amount of the lease payments as if they were note payments, After 6 months, The UPB would be $71,820

$71,820 (- )$5000 down payment at signing of note and mortgage (due at end of 6 month lease to own) makes for a note of $66,820 for 414 months at 7.5% .. Monthly P&I of $451.89 plus taxes, Ins and service fee.

4 year Balloon

Buyer and seller to pay their own closing cost at time of note and mortgage

Seller to pay Ins and Property Tax during 6 month lease

So the things that have changed is the sale price has been reduced, we are crediting the principle reduction amount of the lease payment toward the purchase and the principle payment of the note has been reduced

​Month	Payment	Principal	Interest	Loan Balance
420	$485.45	$35.45	$450.00	$ 72,000.00
419	485.45	35.68	449.78	71,964.55
418	485.45	35.90	449.56	71,928.87
417	485.45	36.12	449.33	71,892.97
416	485.45	36.35	449.11	71,856.85
415	485.45	36.58	448.88	71,820.50