Frequently Asked Questions About Selling Your Mortgage Note
Are you wondering about the potential benefits of selling your mortgage note?
We’ve provided the following answers to commonly asked questions about the note selling process. You can also visit our Contact Us Page if you have a question that’s not shown here.
Why Would I Sell My Mortgage Note?
Owner financing is on the rise, with an increasing number of sellers who have agreed to accept monthly mortgage payments from buyers.
Many people eventually decide to sell their mortgage note because they are experiencing changing financial circumstances. Perhaps they’ve had a reduction in income, or they need cash for an unexpected expense like a medical bill or taxes.
Instead of receiving smaller monthly payments, selling their note allows them to receive a lump sum cash payment to take care of their financial needs.
Other common financial situations that might cause people to sell a mortgage note incude freeing up money for:
- Starting a business
- An investment opportunity
- College tuition
- Relief from worrying about receiving timely payments
How Can I Maintain or Improve the Value of My Note?
The value of your note is determined when the property is sold. After that, you have some options to maintain or improve the note value.
- Keeping accurate records of payments received from the borrower.
- Providing verification that property taxes have been paid, along with a schedule of future property tax due dates.
- Maintaining a copy of the property insurance policy for each year.
These documents may be requested for a variety of reasons. Having them will help you maintain the value of your asset.
Do I Have to Sell All of My Note or Can I Sell a Portion of It?
When you decide to sell your note, you have the option to sell all or a portion of it to us.
If you decide to only sell a portion of your note, you will receive a lump sum payment up front. Once a specified amount of time passes, the note reverts back to you and your cash flow will resume.
This is ideal for those who only need a small lump sum now and want to maintain their investment for the future.
Our team will work with you to determine your best options.
How is the Value of My Note Determined?
The value of your note is determined by a number of factors. These include the down payment, interest rate, monthly payment amount and terms, in addition to the buyer’s payment history and credit score. The type, condition, and value of the property also impact the value of your note.
Given inflation and the time value of money, payments made today are worth more now than in the future. Both of these factors play a significant role in the evaluation process required to determine the value of your note.
Will Selling My Note Affect the Payer?
The payer will only experience a minor change if you sell your note. They will only need to change where their payment is made – everything else will remain the same.
How Do I Receive Funds if I Sell My Note?
Funds in the amount of the predetermined purchase price will be sent to the title company via wire transfer or cashier’s check once all documentation is finalized and signed.
Sending the funds to the title company allows you to exchange your documents for the funds, which will allow for a safe and secure transfer of your asset.
How Do I Get Started?
To get started with selling your note, please use our online form to request a quote.
Please note that you will also be required to provide the following documentation:
- Note and Mortgage (Deed of Trust or Contract)
- Closing Statement (HUD-1)
- Buyer information
- Payment history and outstanding balance
- Previous title insurance policy
- Current hazard insurance policy
Still Have Questions?
If you don’t see an answer to your question, please visit our Contact Us Page and we’ll be happy to assist you.