Mortgage notes are financial instruments that define and enforce the terms of a mortgage loan used to purchase real estate. Holders of mortgage notes for a home, business, or property can sell them in cash to a buyer in the secondary mortgage note industry. Selling a mortgage note isn't always a quick process, but it's quite simple. The seller can choose either a full purchase or a partial sale.
Once the terms of the sale have been established, the prospective buyer will request all available documentation related to the loan. This includes loan terms, payment history, and any other information that may help with the underwriting process. Consultants (also called brokers) can be an excellent option for selling your note. It is often very difficult to find ticket buyers directly.
Some may only work with consultants, while others are regional. Consultants often work with many funders, giving you multiple options when it comes to selling your note. In these cases, the seller can own their property directly and can offer the buyer their own mortgage offer. Many companies are willing to buy their mortgage note and take risks because they are securities backed by collateral.
A private mortgage is a loan that is financed through a private source rather than a traditional lender. We pay ALL costs associated with the purchase of your mortgage asset, including appraisal, BPO and title fees. In addition to that, you need to make sure that the mortgage note buying company you work with has certain qualities that will make you comfortable discharging your promissory note. Chances are that if you sold real estate and you have a mortgage note, you will have it for one of two reasons.
Before you begin the process of selling notes, make sure you have all the information you need to receive a mortgage note quote. In fact, you may have been told that if your situation changes in the future, you could sell your promissory note for a lump sum of cash. When selling a real estate note, some people assume it's a “one-size-fits-all” similar to getting a loan from a bank. Now the borrower may be panicking and is telling himself “the lender is selling my mortgage and the terms are going to change dramatically.
As you may already know, there is a solid world of consultants, private buyers and financial institutions interested in purchasing mortgage notes. For example, the seller of the note will receive a much higher price if the payer has a credit rating of 700 compared to a payer with a credit rating of 600 or lower. The new lender must follow exactly the same terms and language in the original mortgage agreement that was agreed upon. Helping the borrower maintain good credit, set the shortest possible loan period, and secure collateral to secure the loan will increase the sale price of the promissory note if the holder of the mortgage note ever decides to sell.