Bond for Deed & Wrap Seller Analysis
Analyze your seller-financed deal: monthly spread, cash flow, balloon alignment, and amortization comparison.
Your Underlying Mortgage
$
%
$
Proposed Bond for Deed Terms
$
$
Amount Financed: $260,000
%
Positive Spread
Monthly Spread
$536.40
$2,015.78 buyer - $1,479.38 underlying
Annual Cash Flow
$6,437
Net Interest Earned
$157,499
$223,787 earned - $66,288 paid
Seller Equity at Start
$80,000
Amortization Comparison
| Year | Underlying Balance | Wrap Balance | Seller Equity | Monthly Spread |
|---|---|---|---|---|
| 1 | $190,067 | $253,815 | $83,748 | $536.40 |
| 2 | $179,729 | $247,182 | $87,454 | $536.40 |
| 3 | $168,969 | $240,070 | $91,101 | $536.40 |
| 4 | $157,772 | $232,444 | $94,673 | $536.40 |
| 5 | $146,118 | $224,267 | $98,149 | $536.40 |
| 6 | $133,990 | $215,499 | $101,509 | $536.40 |
| 7 | $121,367 | $206,097 | $104,730 | $536.40 |
| 8 | $108,230 | $196,015 | $107,785 | $536.40 |
| 9 | $94,558 | $185,204 | $110,646 | $536.40 |
| 10 | $80,329 | $173,612 | $113,283 | $536.40 |
| 11 | $65,520 | $161,181 | $115,661 | $536.40 |
| 12 | $50,108 | $147,852 | $117,745 | $536.40 |
| 13 | $34,067 | $133,560 | $119,492 | $536.40 |
| 14 | $17,374 | $118,234 | $120,861 | $536.40 |
| 15 | $0 | $101,801 | $121,801 | $536.40 |
| 16 | $0 | $84,179 | $104,179 | $2,015.78 |
| 17 | $0 | $65,284 | $85,284 | $2,015.78 |
| 18 | $0 | $45,023 | $65,023 | $2,015.78 |
| 19 | $0 | $23,297 | $43,297 | $2,015.78 |
| 20 | $0 | $0 | $20,000 | $2,015.78 |
Louisiana Bond for Deed Notes
- •Louisiana bond for deed contracts are governed by La. R.S. 9:2941 et seq.
- •Buyers have a 10-day rescission period after signing a bond for deed contract.
- •The seller retains title until the buyer completes all payments and the final act of sale is executed.
- •The bond for deed contract must be recorded in the parish conveyance records to protect the buyer's interest.
- •Louisiana requires specific cancellation notice procedures before terminating a bond for deed contract (La. R.S. 9:2945).
Related Calculators
This estimate is based on Louisiana promulgated title insurance rates, Southern Title's standard fee schedule, and parish-specific costs as of April 2026.
Typical variance from your actual Closing Disclosure: ±$500. Differences are primarily due to recording fees (which vary by document page count) and notary/attorney fees. If your variance exceeds $1,500, contact us to investigate: (504) 368-2240
Actual charges are determined by the title company, lender, and parish recorder at closing. Recording fees are estimates and vary by document page count.
Frequently Asked Questions
What is a wrap-around mortgage?+
A wrap-around mortgage is a form of seller financing where the seller's existing mortgage stays in place and a new, larger mortgage "wraps around" it. The buyer makes payments to the seller at a higher interest rate, and the seller continues paying the underlying mortgage. The seller profits from the spread between the two rates.
What is a bond for deed in Louisiana?+
A bond for deed is Louisiana's version of an installment land contract, governed by La. R.S. 9:2941. The seller retains title to the property while the buyer makes payments over time. Once the buyer completes all payments, the seller transfers title through an act of sale. The buyer has a 10-day rescission period after signing.
What is the due-on-sale clause?+
A due-on-sale clause in your mortgage allows the lender to demand full repayment if ownership of the property is transferred. While this clause exists in most mortgages, it is rarely exercised in practice for owner-financed transactions, especially bond for deed arrangements where the seller retains title. Based on over 30 years of experience at Southern Loan Servicing, lenders typically do not invoke this clause as long as payments remain current. However, sellers should be aware it exists and consult with an attorney about their specific situation.
What happens if the buyer defaults on a bond for deed?+
In Louisiana, the seller must follow specific cancellation procedures under La. R.S. 9:2945 before terminating a bond for deed contract. The seller must provide written notice and allow the buyer a cure period. Simply evicting the buyer without following these legal steps is not permitted. The contract should clearly outline default remedies.
How is the seller's spread calculated?+
The seller's spread is the difference between the buyer's monthly payment to the seller and the seller's monthly payment on the underlying mortgage. For example, if the buyer pays $2,000/month and the seller's underlying payment is $1,400/month, the monthly spread is $600. The total profit also includes the net interest spread over the life of both loans.
What is a balloon payment in owner financing?+
A balloon payment is a large lump-sum payment due at a specified date before the loan would naturally amortize to zero. In owner financing, balloon payments are common — the buyer makes regular monthly payments for a set period (e.g., 5 years), then must pay the entire remaining balance. Sellers should ensure balloon dates on their wrap/BFD align with their underlying mortgage to avoid a cash-flow gap.
Structuring an Owner-Financed Deal?
Southern Title handles closings, title searches, and document preparation for wrap-around mortgages and bond for deed transactions across Louisiana.