What does this mean...
“Seller is offering financing for 5 year term with 30 year amortization @ 5.25%” Is this like an ARM? What happens after 5 years?
“Seller is offering financing for 5 year term with 30 year amortization @ 5.25%”
Is this like an ARM? What happens after 5 years?
For five years you pay monthly interest and principal as if it were a fixed rate 30 year mortgage. As others state, you’ll need to refi with a bank.
Agree with cmu. This is common in owner financing, they don’t want to hold the note forever, and expect that in 5 years time you will be able to refinance with a regular bank since you have equity in the property (and better credit, if you currently have bad credit scores). Typically whenever you refi they get the balloon payment from the other bank.
You’ll have to get details. Sounds like it’s due in 5 (balloon payment.)