If you create a separate entity like an LLC set up a separate bank account(s) for the business - and look up "LLC entity formalities" while you're at it.I will say (with the voice of some experience) don't bother analyzing things to the Nth degree to determine an ultimate "exit strategy for the LLC".

They may ask you to submit a formal request in writing in which case you can either fax or email the request in by referencing the loan number and asking the bank to kindly initiate a recast on your mortgage. 

If the lender's specific desktop appraisal comes in low you can usually then pay for a formal appraisal if needed.

If your step mom is already helping out, then maybe just formalize that in a lease? 

Home equity loans may not be obtained on land that is taxed as “open space” or as agricultural land.The loan may not close until twelve (12) days after the borrower has applied for the loan and has received a formal notice of the borrower’s legal rights.Not less than one day before the closing, the borrower must be given a final itemized disclosure of the actual charges associated with the loan, including actual points, fees, costs and interest.

Hypothetically, if I did not pay a month mortgage, the third party would have immediately notified the seller, initiated foreclosure, and sent formal demand for payment causing the entire balance to balloon immediately.

The people I have met that are super pumped up about it are people that watched one too many boiler room or wolf of Wall Street type movies and took the wrong message from it. if you need a place to hang your license and don’t want to be bothered with office formality it works but make sure you sell over $3,250,000 a year with a minimum of 3% commission or you are leaving money on the table if not losing money.

@V.G Jason  thanks   1) make sure you are  clear with aany agent  upfront that your plan is to use  seller financing  approach    2)  you might  get   formally   pre approved  with a lender  in case you find the  right property but the  seller  financingisnt possible 

Quote from @Kaitlin Scutari: It was not a formal letter. 

The value of your personal sphere, formal and informal, cannot be overstated.