Introduction: Turning Monthly Payments into a Lump Sum
If you’re holding a mortgage note in Texas, you already know what it’s like to get those steady monthly payments.
But maybe now you’d rather have a lump sum instead of waiting years for the borrower to pay off the note. and you are looking to sell a mortgage note in Texas.
Selling your note can turn a slow trickle of income into a big payout you can use right now — whether for investment opportunities, paying off debt, or simply enjoying life.
The process is more straightforward than most people expect… if you know the right steps and work with the right Texas note buyer.
Hi, I’m Kevin Clancy, president of American Funding Group, and a seasoned real estate professional, investor, and note buyer with over 30 years of experience helping people across Texas unlock the value of their real estate assets. I have built one of the nation’s most trusted firms specializing in the purchase of private mortgage notes, deeds of trust, land contracts, and real estate-secured agreements.
In this guide, I’ll walk you through exactly how to sell a mortgage note in Texas, from your first thought to your final check — and I’ll sprinkle in a few insider tips from 30+ years of buying notes across the Lone Star State. So let’s get right to it and look at the Texas Note Sale process.
Step 1: Understand What You’re Selling
A mortgage note (in Texas, typically a deed of trust) is the legal promise from your borrower to repay you under specific terms.
When you sell your note, you’re essentially selling the right to receive those payments to another investor.
Types of notes we see in Texas:
- Residential notes — Single-family homes, condos, duplexes
- Commercial notes — Office buildings, retail spaces, warehouses
- Land notes — Raw acreage, ranch land, subdivision lots
- Mixed-use or specialty property notes — Airbnb rentals, oil field housing, rural resorts
Each type has its own market and valuation quirks, but the process of selling is broadly similar.
Step 2: Gather Your Paperwork
Think of this as gathering your “note selling toolkit.” The better organized you are, the faster you’ll get offers — and often, the higher they’ll be.
Here’s what Texas note buyers usually ask for:
- Original Promissory Note – The signed document stating the borrower’s repayment terms.
- Deed of Trust – The Texas-specific mortgage instrument securing the property.
- Payment History – Records of all payments made (bank statements, ledgers, canceled checks).
- Property Insurance Info – Proof the property is insured and in good condition.
- Property Tax Records – Showing taxes are paid and current.
- Any Modifications – If you’ve ever changed the interest rate, payment amount, or due date, have those documents ready.
Pro Tip: Missing documents don’t necessarily mean you can’t sell — but they can slow down the process or lower your offer.
Step 3: Get a Free, No-Obligation Quote
Reputable Texas note buyers (like us at American Funding Group) will give you a free quote based on:
- Remaining balance
- Interest rate
- Payment history
- Property type & location
- Borrower’s credit profile
- Texas-specific foreclosure timelines (yes, our fast 41-day process matters!)
After a borrower credit check and a internet property value check, you’ll get an offer.
Step 4: Decide on a Full Sale or Partial Sale
Here’s a big misconception — you don’t have to sell your entire note.
Full Sale:
You sell the entire remaining balance, and the buyer takes over collecting all future payments. You get the biggest lump sum now.
Partial Sale:
You sell just a set number of future payments — for example, the next 60 payments — and then the note reverts back to you afterward.
Why consider partials?
- Keeps some long-term income
- May be more tax-friendly in certain situations
- Lets you unlock cash now without giving up the whole note
Step 5: Accept the Offer & We’ll Begin Due Diligence
When you agree on the type of your Texas Trust Deed sale, your Texas Note buyer will send you a written offer sometimes called a Mortgage Purchase Agreement (MPA). Now your Texas note sale process should m0ve fairly quickly. As soon as you sign and return the MPA, due diligence is started. During due diligence, the buyer double-checks all the documents you provided.
At this point in the Texas Notes sale process, the remaining due diligence primarily consists of two things.
We determine the value of the property with a drive-by appraisal or BPO (broker price opinion.
In Texas, we use a title company or attorney to handle escrow. They’ll:
- Verify the property’s title is clear
- Check for unpaid taxes or liens
- Make sure the buyer gets a first-position lien (if that’s what you’re selling)
You don’t need to handle any of this yourself — a good note buyer coordinates it all.
Step 6: Closing.
Once everything checks out, closing is simple. The Texas Note buyer will prepare the closing documents.
- You sign an Assignment of Deed of Trust transferring your rights to the buyer
- The title company records the transfer in county records
- You get your lump-sum payment — often via wire transfer
Step 7: Enjoy Your Cash & Your Freedom
That’s it. You’ve just turned a series of monthly payments into instant capital.
Some sellers reinvest the cash into:
- New real estate projects
- Stock market or retirement accounts
- Paying off high-interest debt
- Funding college tuition or business expansion
- Taking a well-earned vacation
Texas-Specific Advantages When Selling Your Note
Texas is one of the most note-seller-friendly states in the U.S., and here’s why:
- Fast Foreclosure Process – As little as 41 days after default, compared to months (or years) in other states.
- Strong Real Estate Market – Texas cities are growing fast, making property-backed notes attractive to investors.
- No State Income Tax – More of your profit stays in your pocket.
Because of these advantages, Texas notes often sell for better prices than similar notes in slower, riskier states.
Common Mistakes Texas Note Sellers Make (and How to Avoid Them)
- Accepting the First Offer Without Shopping Around
Not all Texas note buyers value notes the same way — and some out-of-state buyers undervalue Texas paper. - Not Providing Complete Documentation
Missing payment history or unclear terms can lead to delays or reduced offers. - Ignoring Partial Sale Options
Many sellers don’t realize they can keep part of their note for long-term income. - Waiting Too Long in a Falling Interest Rate Market
If your note’s interest rate is well above current bank rates, it’s worth more now than if rates drop further.
Why Work with a Texas-Savvy Buyer Like American Funding Group
We’ve been buying notes nationwide for over 30 years — but Texas has always been one of our strongest markets.
We understand:
- How Dallas–Fort Worth suburb growth drives value
- Why Austin tech jobs boost payment reliability
- What makes San Antonio’s military economy stabilize property demand
- How rural West Texas land notes are priced differently from urban homes
When you work with us, you’re not just getting a number — you’re getting a fair, market-driven offer from people who know Texas real estate inside and out. Check our testimonials and Goggle reviews.
Final Word
Selling your mortgage note in Texas doesn’t have to be complicated or stressful.
With the right buyer, clear paperwork, and a basic understanding of the process, you can turn your future payments into cash in hand in as little as two to three weeks.
Whether you sell the whole note or just part of it, you’ll gain flexibility, financial freedom, and the peace of mind that comes with having cash ready for your next move.
Ready to find out what your Texas mortgage note is worth?
Fill out the below form or Contact American Funding Group (772) 232-2383 today for a free, no-pressure quote — and see how much you could get in the Texas market right now.