Wondering How to Sell Your Mortgage Note? A mortgage note is simply a promissory note in which the person receiving the monthly mortgage payments acts like a bank, credit union, or mortgage company. And, sometimes the holder of the note is better off with a large lump sum of money instead of monthly payments. So let’s investigate how to sell your mortgage note.
Risks of a Mortgage Note
Although a mortgage note can usually be easily sold, there are certain risks. First, the note holder assumes the same risks as a bank. While he has the benefit of earning interest, there is always the risk that the borrower won’t make make his payments on time. Here are a few things to consider if you’re thinking about continuing to hold the note or sell your mortgage note:
- Is the property likely to depreciate due to neglect or a bad location?
- Will your financial situation be threatened if the borrower is late on payments or defaults entirely?
- Is the borrower carrying the proper insurance so that you will be covered in the event of a disaster?
Why Sell Your Mortgage Note
One of the advantages of owning a mortgage note is that it can usually be sold to a mortgage note buyerwho specializes in buying private mortgages. Normally, you will be able to can sell the entire note or a portion of it depending on your needs. Common reasons for selling a mortgage note include:
- Eliminating the risk and worry of default
- Freeing up funds for another invesstment
- Paying college tuition
- Settling a divorce
- Dividing an estate
- Needing capital to start a business
How to Sell Your Mortgage Note
If you do decide to sell your mortgage note, here’s what the process involves.:
- Gather all the information and documents concerning your note: property information, promissory note, interest rate, payment history, borrower’s creditworthiness, and so on. The more information and documentation you can assemble, the better off you’ll be.
- Provide all the pertinent details to a note buyer that purchases mortgage notes and get an offer.
- Get the offer in writing… usually called a Mortgage Purchase Agreement
- Accept or decline the offer
- Wait for the mortgage note buyer to complete the due diligence
- Receive and execute the closing package supplied by the note buyer
- Close the deal and receive payment
Normally, there are no constraints on the amount of the note you can sell. It can be the entire mortgage note, a specific amount now and then payments later, or a percentage of each scheduled payment. As selling a mortgage note can be complex and somewhat confusing, we will happily provide any assistance you need.
Send us a message or give us a call today to learn more! (772) 232-2383!
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