Seller / Owner Financing is simple in concept and powerful in execution. The seller becomes the lender. You negotiate every term — the rate, the down payment, the balloon, the amortization schedule. There's no underwriting, no rate lock, no approval timeline. The deal moves as fast as two parties can agree.
The seller holds the note. You make monthly payments directly to them — or to a servicer who manages the note on their behalf.
Unlike a lease-option or land contract, in most seller finance structures you take the deed at closing with a mortgage or deed of trust securing the note.
Rate. Down payment. Amortization. Balloon date. Interest-only period. None of these are set by a lender. You and the seller agree to whatever works for both parties.
Seller financing works best with free-and-clear properties (no existing mortgage) or where the seller has enough equity to carry a note. Free-and-clear owners — often older investors or long-term homeowners — are the ideal candidate. They're not in a rush. They like the idea of monthly income instead of a lump sum they'll owe taxes on.
Your offer frames the deal in terms of what the seller gets: a reliable monthly income stream, the full (or near-full) purchase price over time, and the security of a mortgage lien on their former property. Common terms: 5-8% interest, 20-30 year amortization, 5-7 year balloon, 5-10% down.
The legal package consists of a promissory note (the seller's IOU, detailing payment terms) and a deed of trust or mortgage (which secures the note against the property). A real estate attorney drafts these. CCL coordinates the full transaction through a title company.
The deed transfers to you. The note and deed of trust record at the county. You now own the property with the seller holding a lien — exactly like a bank mortgage, except the bank is your seller.
Most CCL deals use a third-party loan servicer to collect payments from you and distribute to the seller. This adds professionalism and creates a paper trail for both parties — critical if the note is ever sold or the relationship changes.
At balloon maturity, you refinance into conventional financing, sell the property, or renegotiate the terms with the seller. The 5-7 year window gives you time to improve the property, season rental income, or appreciate into strong equity before refinancing.
Land Contract (Contract for Deed): The seller retains the deed until the full purchase price is paid or a balloon occurs. You have equitable interest but not legal title. Less common in CCL deals because it delays full ownership transfer — but useful in certain state-specific situations.
Deed Transfer + Promissory Note + Deed of Trust: CCL's preferred structure. Deed transfers at closing. Seller holds a mortgage lien via a recorded deed of trust. You are the legal owner with a senior lien securing the seller's position. Clean, court-tested, title-insurable.
Wrap-Around Mortgage: Used when the seller has an existing low-rate loan. The seller "wraps" a new note around their existing loan at a higher rate — they pocket the spread. Similar risk profile to Sub-To; CCL evaluates on a deal-by-deal basis.
A long-term landlord in Colorado owns a duplex free and clear. ARV: $420,000. He's 72, doesn't want a lump sum (tax hit), and likes the idea of $2,200/month hitting his account like a pension. He agrees to seller finance at 6.5% interest, 25-year amortization, 7-year balloon, 5% down.
The down payment on a seller finance deal is typically 5-10% — lower than conventional lending, but still real capital. IBC policy loans let you pull this from your cash value immediately, fund the deal, then repay the loan from rental income over time.
Because the interest on a policy loan stays within your policy ecosystem rather than going to a bank, you're not actually losing the capital — you're cycling it. The deal pays back the policy. The policy is ready for the next deal.
See How IBC Works →Bank loans require documented income. Seller finance requires a willing seller. If your income doesn't show on a tax return the way a lender needs it to, this is your path.
Fannie Mae caps investor loans. Seller finance doesn't. Use it to acquire property #5, #10, #20 without touching your conventional loan eligibility.
Current bank rates are painful. Many motivated sellers will negotiate below-market interest when they understand the benefit of spreading their tax liability over time via an installment sale.
Book a free discovery call. CCL will walk through how to find seller-financed deals in your market, structure the terms, and integrate IBC so your capital stays in your ecosystem.