If you need a lump sum of cash for a medical procedure, college, or other big investment, selling your mortgage note is a great way to go. By selling your mortgage note, you will keep the ownership of the property, but an investor will take over the debt. This can give you financial freedom and relieve you of the threat of foreclosure. Read about mortgage notes, how to determine the value, and how to sell them in this article.
What are mortgage notes?
A mortgage note is the legal document that you receive from your mortgage broker when you purchase a property and are using a mortgage to finance this purchase. Mortgage notes are the same as real estate notes. The mortgage note states all the arrangements that you have made with the financier, including the sum of the purchase, the monthly payments, the interest to be paid, the plan for repayment, and the penalty in the case that you do not make payment.
The real estate note can be seen as a contract and act as security for both the lender and buyer. The most important thing for the lender is that the lender will be allowed to take action when there are no payments being made (on time). If you are not able to make payments on time, selling your mortgage note is a good way to gain a lump sum of cash fast. Before you start the selling process, use a mortgage note value calculator to estimate how much your mortgage note is worth.
Source: picture from Pixabay.com by Nattanan Kanchanaprat https://pixabay.com/photos/money-home-coin-investment-2724235/ 09-07-2017
Can a mortgage note be sold?
Yes, it is completely legal to sell your mortgage note. There are financial companies that even specialize in buying mortgage notes. It is possible to sell the entire mortgage note, but also to sell just a part of the note. By selling your mortgage note, you will receive a lump sum which can be put towards another financial investment.
There are lots of reasons for mortgage holders to sell their notes. For example, they no longer want to bear the risk of the loan or they don’t want to manage the payments of the mortgage. Another reason to sell a mortgage note is when you need a lump sum of cash to pay for medical expenses, college, or another big financial investment.
What is the value of my mortgage note and how do I sell it?
The most important thing you need to know before you sell your mortgage note, is what it is worth. It is not often the case that the buyer offers you the same amount of cash than the balance that is left on your mortgage. Before you start the selling process, use a mortgage note value calculator to see an estimation of the lump sum that you will receive. Keep in mind that a thorough inspection of the property is needed before the final sum can be determined. A calculator can only give you an estimation.
If you are happy with the amount the calculator presents, you can start the selling process. The first thing you need to do is gather all the information in your mortgage note, such as the original sum, leftover balance, interest rate, payment plan, and prove that you have been paying (if applicable). Send all this information to the company, which will provide you with a quote if they are interested in buying your mortgage note. Once you accept the offer, an inspection of the property will be conducted and the final contract will be drawn up. It is up to you whether you want to sell or not.
