Seller Financing
Instead of purchasing a property with cash or funds from a mortgage lender, the seller in this type of transaction becomes the "bank", lending the buyer the funds needed to purchase the property. Rates, terms and length may vary.
Michigan Land Contract Calculator
Estimate monthly payments, total interest, balloon payoff, and amortization for a Michigan land contract. Enter the proposed terms, then calculate your estimate.
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For Michigan land contracts
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Amortization Schedule
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Michigan title & closing support
Ask our team about your Land Contract.
Knowing the numbers is only one piece of the puzzle. Our experienced team can cover every portion of the land contract process from drafting the correct documents to providing full payment schedules and interest calculations.
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Land contract closings & recording
Existing contracts, payoffs & refinancing
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The basics
Understanding Seller Financing and Land Contracts in Michigan
A land contract combines a real estate sale with seller financing. Determining the payment terms are just one part of the transaction. Land contracts also involve specialized recorded documents to protect both the buyer and seller. After closing, additional steps must be taken to ensure the smooth transfer of funds and vested ownership.
Memorandum of Land Contract
In place of a deed and potentially a mortgage, a memorandum of land contract will be prepared prior to closing and recorded in the public record. This serves as evidence of the land contract and the agreements between parties.
The Payoff
If the contract has a balloon, the remaining balance becomes due on the agreed date. Buyers often plan ahead for cash payoff, refinances, sales, or another agreed resolution. Once the full balance has been paid, a deed is recorded which completes the transfer of ownership.
This information and the calculator is provided solely for planning purposes only and is not legal, tax, financial, or underwriting advice. Actual contract and closing requirements depend on the transaction.
Land contract FAQs
Common Questions for Land Contracts in Michigan
What Is a Land Contract?
A land contract is a seller-financed real estate agreement. Instead of the buyer receiving a traditional mortgage at closing, the buyer makes installment payments directly to the seller under the contract terms.
The buyer usually receives possession and an equitable interest in the property, while the seller keeps legal title until the land contract is paid off or otherwise satisfied.
How Are Payments Calculated?
Land contract payments are commonly estimated using the purchase price, down payment, interest rate, amortization term, and any balloon payment date.
The calculator subtracts the down payment from the purchase price, estimates monthly principal and interest, and shows the remaining balance at the selected balloon date.
Are Land Contracts Legal in Michigan?
Yes. Land contracts are entirely legal and commonly used in Michigan for residential, vacant land, investment, and commercial transactions. A Michigan land contract should clearly state the purchase price, interest rate, payment terms, balloon conditions, tax and insurance responsibilities, and default remedies.
Recording the land contract or an appropriate memorandum can help provide public notice of the buyer's interest in the property.
Who is Responsible to Pay Taxes and Insurance?
Taxes and insurance are controlled by the written land contract. In many transactions, the buyer is responsible for property taxes, homeowners insurance, maintenance, and repairs during the contract term.
The seller may also require proof of insurance and may be listed as an additional insured or loss payee depending on the contract terms.
What Is a Balloon Payment?
A balloon payment is the remaining balance due at a certain point before the full amortization term ends. For example, a land contract may be amortized over 30 years but require the buyer to pay off or refinance the balance after 5 years.
Balloon structures can keep monthly payments lower, but they also require a clear plan for payoff, refinance, or extension.
Can You Refinance a Land Contract?
Many buyers use a land contract as temporary financing and later refinance into a traditional mortgage. A refinance may depend on credit, equity, payment history, property condition, title requirements, and underwriting approval.
Knowing the estimated balloon payoff and remaining principal can help buyers and lenders plan ahead.
Full service land contract guidance
Regardless of where you are in the process, you can trust our team to help.
Send us a message or call to speak with a team member. We'll help identify the next steps for title, closing, payoffs or refinances.
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Lime Title Agency LLC
4435 Old US 23
Brighton, MI 48114
(810) 588-9689
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