Private notes are predominately created by owner-financed sales of real estate properties. As a seller, you know owning a mortgage note is a great way to maintain a steady income. Now you’re ready to collect a lump sum.
Sellers have different reasons for want to sell their mortgage notes, and there are several things to consider before you do. For example, you might want to wait on selling, because the borrower is consistently making their payments. That means you continue to receive a steady stream of income. The interest rate is might be satisfactory, or you simply don’t mind the risk of carrying a seller-financed note. You may not mind managing the note and the details inherent to it either.
On the other hand, you are probably ready to sell your note if you’ve found that the borrower is less reliable with payments, or they’re failing to pay their taxes on the property. You might suspect the borrower will default and you don’t want the expense of dealing with that possibility. Maybe you’re kids are starting college or you want to pay off credit card debt. The lump sum might be to renovate your kitchen. Everyone has their own reasons.
Note Buyer Go will walk you through the process once you decide you’re ready to sell your residential mortgage note. What you can expect from a buyer depends upon their personal criteria as well as the calibre of the note. The following are a few questions buyers are likely to ask, and with us by your side, you’ll have all the right answers.
- How much time is left on the loan?
- Have payments been consistent?
- What was the amount of the deposit?
- What is the state of the property itself?
- How much equity is in the collateral?
- What is the borrower’s credit score?
- What is the actual property value (not its selling price)?
- What is the interest rate on the loan?
Don’t get too concerned if your note falls short in one or two of these areas. This can be balanced against the benefits of your note. For example, a buyer may be uncomfortable with the borrower’s credit rating; however, the buyer might overlook this if the deposit was a hefty one or if the payments have been consistent.