When a home buyer borrows money to buy a property, they will typically sign a mortgage note. This is a legally binding contract that outlines the loan amount, interest rate and payback period among other things.
Lenders sometimes sell these mortgage notes on the secondary market to investors. This can offer savvy buyers an opportunity to purchase performing debt at a discount.
Why Sell Your Note?
A mortgage note is a financial document that details how much money you are borrowing, what the terms of the loan are and what penalties will be applied if you fail to make your payments. It also gives you rights to prepay the loan early and if there are co-signers on the note, what their obligations are.
Selling your mortgage note can be a quick and easy way to get cash now, rather than waiting years for your loan to pay off. It can also provide you with a lump sum of cash that you can use for a wide variety of purposes, from paying off debts to starting your own business.
Sometimes, life changes unexpectedly and you need cash quickly to meet your goals. Maybe you want to buy a new car, send your child to college or follow your dream to start a business.
How Much Can I Sell My Note For?
A mortgage note is a loan that is secured by real estate. This instrument is a type of promissory note and can be a great way to obtain cash from your property without having to sell the home itself.
When you have a mortgage note for sale, the amount of money that you can receive is determined by several factors. This includes the total amount of the mortgage, the loan-to-value (LTV) ratio, and the investment to value or ITV (what the buyer is paying for the note).
The seasoning of the loan is also a big factor in determining what the note can be sold for. The longer the loan has been collecting payments, the more money you can expect to get for your note.
Another factor is whether or not the borrower is an individual or a corporation, trust or LLC. If the borrower is an entity, obtaining a personal guarantee from the buyer may increase the price of your note.
How Do I Sell My Note?
If you're ready to sell your mortgage note you can do so quickly and easily with a simple online process. All you need to do is take a few minutes upfront to gather your information and documents, and then we'll handle the rest.
Selling a note can free up cash for immediate needs like paying off other debts, investing, or taking that vacation you've always wanted. It can also be used to fund future goals, such as buying a new car or starting your business.
The mortgage note sale process is easy when you work with an experienced note buyer. They will make a quick and premium offer to buy your mortgage note, providing you with a large amount of money up front.
After you receive an offer, the buyer will perform a detailed review of your mortgage or deed of trust, known as due diligence. This includes checking your borrower's credit, property taxes and insurance status, payer interview, among other important items.
How Do I Get Started?
Once you’ve decided that it’s time to sell your mortgage note, the next step is to find a buyer. There are several major note-buying companies out there so it’s important to do your research and select the best one for your needs.
The best way to start is by getting a free quote from a reputable company with years of experience selling notes. These companies will be able to provide you with an estimate without pressure and are a great way to get the cash you need quickly.
Once you’ve chosen a buyer, the process of selling your mortgage note is fairly simple. You’ll need to submit some information about your note, and then the note-purchasing company will review this information and make an offer.