Handling large amounts of money sounds like a dream, but it can be stressful, especially during uncertain times. You never know what life may throw at you—some situations may lead to an increased need for funds that you don’t have.
If you’re in desperate need of cash flow, then your best bet is to sell mortgage notes!
What Is a Mortgage Note?
A mortgage note is a financial document that acts as a lien against the property, serving as collateral for the payment described in the note. This promissory note contains the details of the loan and the agreement to repay it over a specific amount of time.
Mortgage notes will include some details, such as:
- Date and place of issuance
- Interest rate
- Terms of repayment
- The duration of the loan
- The principal amount of the loan
The private lending company or bank will be responsible for holding your mortgage note until you pay off the loan. Mortgage notes serve as an easily liquidated asset—owners of the mortgage note can choose to sell it to a company that buys mortgage notes to receive financing from another source.
The Risks of Holding a Mortgage Note
Every loan comes with the risk of failure to pay. In this economic landscape impacted by the global pandemic, there is a high possibility of people not paying for the amount they borrowed from you in exchange for property ownership.
Most mortgage notes are for five years—anything can happen during that length of time. Although a mortgage note gives lenders security throughout the lending process, there are still risks that could affect you.
If your financial security will be threatened if the homeowner won’t make payments or the property’s value is at risk of depreciating, you may want to consider selling your mortgage note to mitigate the risks.
On Selling Your Mortgage Note
The best thing about owning a private mortgage note is that it can be quickly liquidated. If you prefer having a large lump sum instead of scheduled payments, selling your mortgage note is the right move to make.
Selling a mortgage note isn’t just to acquire money for immediate needs—you may also sell your mortgage note for several other reasons, such as:
- Paying off debt;
- Paying for medical bills;
- Funding college education;
- Moving money to a different investment;
- Starting a business venture; or
- Dividing an estate.
You are free to spend the money generated from selling a mortgage note however you want to! In addition, the process of selling it is even smoother than the regular mortgage deal you’re familiar with.
How to Sell a Mortgage Note
Fortunately, selling your mortgage note is simple and easy, as many companies are willing to buy mortgage notes.
Make sure to follow these steps when looking to sell a mortgage note:
- Gather all of the details of your mortgage note. Familiarize yourself with the necessary information from your note, such as the amount, length of time, and interest rate.
- Explore various mortgage note buying companies. Never sell your mortgage note to the first institution that shows interest! Looking for a company takes time—learn about the different companies and find which one can best suit your needs.
- Contact the company. Once you’ve chosen the best company that buys mortgage notes, provide them with the necessary details to receive a quote based on some factors. Your quote may be affected by the current market, estimated cost of the property, terms of the note, and competitors’ rates.
- Examine the quote. Before submitting the contract, make sure to read through every detail to determine whether you’re satisfied with what the company can offer you.
- Accept the offer. Once you’ve thoroughly read the purchase details and are satisfied with the amount, the company will go through the due diligence phase to get the details in order and pay you the specified amount.
Conclusion
Selling your mortgage note is indeed a smart financial move for those who want to receive a large lump sum of money immediately. As long as you know the proper steps to take and work with a business that can help you throughout the process, you’ll be able to sell your note without a problem!
If you’re planning to sell your mortgage note, why not sell it to one of the best companies that buy mortgage notes? As a trusted mortgage note buyer for more than 45 years, we at Edward J. Adams Mortgage Note Brokerage can get you the most money possible! Complete our quote worksheet to get a personalized note report!
