Frequent Questions from Private Note Holders Wishing To Sell A Mortgage Note
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Many individual note owners don’t really know the options they have with their private mortgage or Deed of Trust. As I get a lot of questions about how to sell a mortgage note or selling a trust deed, I have come up with a list of the most asked FAQs that might be of benefit.
Below are questions along with answers that I get regularly:
1. What are the advantages of selling a mortgage note? - The two biggest pluses of selling a note are a) Accessing the cash now for higher return investments or unexpected expenses and b) Riding you of the irritations of keeping records of the borrower’s payments, etc.
2. Is it possible to sell a portion of my note? Yes, we do partial purchases all the time.
3. Can you explain the criteria for how much I will get for my private mortgage note? There are 5 main elements a Normal 0 Mortgage Buyer looks at. They are: Equity in the property, seasoning on the note, the interest rate on the note, the amount of time remaining on the mortgage and finally the creditworthiness of the mortgagor.
4. Will an appraisal be needed in order for me to sell my private note? Yes in order to determine the loan to value of the security. Occassionally, depending on the housing market, a Real Estate Broker’s assessment will suffice.
5. Will you pull the buyer’s credit? Yes, it is a critical component in determining the lump sum payment for your private note.
6. Do I have to tell the buyer I’m going to sell the mortgage? Yes. That is the law.
7. How do I know if the note or deed of trust allows me to Normal 0 sell my note? Just read the original note but every note I’ve reviewed allows for the sale of the note. It’s standard in most mortgage agreements.
8. Can I Normal 0 sell deed of trust just like a private mortgage? the selling process is the same.
9. I wish to sell my note payments for some cash but I am worried about losing all the monthly income? Not to worry. Most note buyers can do a partial purchase of your private mortgage for only the amount you are looking for.
10. Is there a minimum mortgage note amount mortgage investors will buy? Ours is thirty thousand dollars.
Lastly, don’t make the assumption you can’t get the payout you want from the sale of your mortgage or deed of trust. There are a lot of ways to structure a note sale so as to accomplish your financial goals. The key, however is to communicate to the mortgage buyer precisely what your goals are. That way they can structure the mortgage note purchase to exactly fit your needs.
