How to Fill Out a Seller Finance Addendum

Using a seller finance addendum can help you sell your house more quickly if the economy is experiencing a downturn and mortgage lenders are tightening their lending requirements. Seller finance addendums specify the terms of the mortgage when a homeowner is providing the financing for the buyer. By financing the selling price, a seller can accept an offer from a buyer that does not qualify for a traditional mortgage. While a seller can download an addendum from various providers, he should consult a lawyer to ensure that the form meets the legal requirements for his state.

Schedule a meeting with the purchaser to fill out the addendum. Being together when you complete the addendum can make signing the document in front of a notary simpler as the same notary can witness both signatures.

Complete the addendum, including your name, the purchaser's name and a description of the property. Include the type of financing that you are providing, such as first mortgage, second mortgage or deed of trust.

List the terms of the loan. Include the amount you are financing, interest rate of the loan and the amount of the purchaser's monthly payment. Check whether the payment will apply toward interest only or incorporate principal and interest. State how many years and months the purchaser must make payments and whether he can prepay the loan with or without a penalty. If the purchaser can prepay the loan, but must pay a penalty, state the penalty for early repayment.

Select whether you require the purchaser to prepay insurance and property taxes into an escrow account. If you do not require an escrow account, specify the manner in which the purchaser must provide proof of payment for taxes and insurance.

Include any credit verification documents that the purchaser must provide to you before you grant loan approval and how long the purchaser has to present you with the documentation before the addendum is void.


  • If you require a down payment, specify the amount in the addendum.


  • If you finance the home, you will have to foreclose to regain your property if the purchaser defaults on the mortgage.