Selling Mortgage Notes
Questions About Selling Mortgage Notes?
Want to learn more about the process of selling a mortgage note? Unsure of how we determine your note’s value? Would you like to make your note worth more in the future? Our FAQ section answers these questions and more.
Why Choose Owner Financing?
In recent years, owner financing has become more commonplace. Owner financing is when the owner of a property sets terms with a buyer to accept payments over time to purchase the property. The property owner in essence becomes the bank. This situation works well for many reasons:
• There is a much faster turnaround time to sell a property.
• The owner receives monthly income from the newly established mortgage note.
• Everyone avoids bank fees and red tape getting a traditional loan approved by a bank.
• The seller has a lot more options when picking a qualified buyer.
When owner financing your property you have to be prepared for all situations. For example, a buyer may stop paying on the note. This brings us to one of our most frequently asked questions:
Why Would I want to Sell My Mortgage Note?
Situations can and do change all of the time. Maybe the buyer is late on payments, or you simply do not want the hassle of managing the process. As time passes and circumstances change, people often want a lump sum for their note instead of collecting monthly payments for years. Here are a few other reasons we find people have to sell their mortgage note:
• Fund (a sometimes early) retirement.
• Pay personal or business tax debts.
• Invest in a new opportunity that has become available.
• Traveling and vacations, or other lifestyle changes.
• Pay for a child’s or grandchild’s college tuition.
• Unplanned changes in finances, such as losing a main source of income.
• Stress reduction. No more need to worry about collecting payments or other issues.
• Accounting challenges that come with owner financing – regulations, dealing with the IRS, tax implications, and more.
What are Note Appraisals?
Simply put, a note appraisal shows you the market value in cash, and the future cash value of the payments you receive on your note. There are a lot of factors to consider, but market conditions are of course one of the most important. Often times this is referred to as a note analysis or a quote as well.
Because market conditions can change, we recommend you have your note analyzed on a yearly basis.
What Can I Do to Maintain the Value of My Note?
There are three things you can do to maintain the value of your note:
• Keep accurate and complete records of payments received
• Collect and retain a copy of the property insurance from the buyer annually
• Ensure property taxes are being paid
Of course, much of the value of your note is determined by the conditions of the initial sale of your property, but ensuring these three items are taken care of helps protect your investment.
How Do you Determine the Value of My Note?
The market value of a note is affected by several factors. They include the down payment, interest rate, payment amount, and term as well as the buyer’s credit rating and payment history. The type, condition, and value of the property also impact the value of your note.
The time value of money, which makes payments due now more valuable than payments due in 20 to 30 years, also plays a role in the evaluation process. Generally speaking, due to inflation, money in your pocket today is worth more now than later. All of these elements will be taken into consideration in determining the current value of your note.
Will Selling My note Affect the Payer?
No. The payer will not have their payments changed in any way. Typically the only thing that changes is who and where the payer sends the payment each month.
What Do I Do to Get Started?
The best way to get started is to fill out our form here, or give us a call. We will also request copies of the documents below relating to your transaction. If you have questions about them, no problem, just let us know:
• Copy of the Note and Mortgage (Deed of Trust or Contract)
• Copy of the Closing statement
• Buyer information
• Pay history and current balance
• Previous title insurance policy
• Current hazard insurance policy
Once we have reviewed everything we will make you an offer on the note. This offer is contingent on the standard title, appraisal, and buyer’s credit review being completed and verified. Once under contract, you will receive your cash as soon as all of the documentation can be obtained. This typically takes as little as 10-15 working days.
How Do I Receive Payment for My Note?
The purchase price is paid in guaranteed funds (cashier’s check or wire transfer) upon receipt of the final transfer package and original documents.
We are happy to wire funds to the title company so you may exchange your original documents for the proceeds, assuring the safe and secure transfer of your valuable asset.
Why Should I Choose Capital Assets Group?
We know you have a lot of choices on how and where to sell your mortgage note. Here are some reasons you would want to work with us:
• We Close Fast and Get You the Cash You Want.
• There are Never and Out of Pocket Expenses for the Seller
• Our Cash Offers are the Best on the Market and Fair to You
• Our Company is Financially Healthy so we can Make a Deal Today
• We Buy Notes Nationwide and Offer Creative Solutions
• All of your Options are Customized for you and Put in Writing
• We Treat Everyone we Work with Fairly and with Respect
Have More Questions?
Still have questions and want to talk before you fill out the form? No problem! We are available by phone at (940) 735-0523 or use the contact form to contact us without entering your address.