What is A Mortgage Note? How To Sell Your Mortgage note

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!