I want to sell my mortgage note… What is it worth?
Great question. When we are determine the value of a mortgage we look at 3 major factors.
The first group of factors all relate to the borrower. We are interested in two things: 1) how is your payor performing on his note with you, and 2) how is he performing with his other creditors. If your borrower has good credit and is making all payments on time, we will pay more for your mortgage note then if your payor has weak credit or poor performance.
Next, we look at the property type which secures your mortgage note. The most desirable real estate note is the mortgage on a single-family owner-occupied residence. Even a borrower with good credit can run into financial difficulty due to a number of factors, like illness, loss of job or divorce. Generally when someone doesn’t have enough money to pay all his bills, the mortgage payment on his home is the first payment he will make. But a mortgage payment on an investor property or land is much less important and less likely to be paid in a timely manner.
Therefore, we will pay more for a mortgage on a single-family owner-occupied house then we will pay for a mortgage note for an investor property, commercial building or raw land.
Then we look at the note itself. How long has it been in place? What are the payment terms? What’s the interest rate? How much equity does the payor have at risk?…What is the current note balance as compared to the current property value?
This is risk-reward business. The less risk that we have to take, the more we will pay for the note. So when you decide that “I want to sell my mortgage note” know that we have to consider all the above factors.
If you have any questions don’t hesitate to call (772) 232-2383
or reach out to American Funding Group with any questions…