The Trusted Home Buyer Logo602-456-4440

What is A Mortgage Note and How To Sell Yours in Phoenix

Martin Boonzaayer

December 4, 2019

A mortgage note is simply a mortgage in which the person receiving the monthly mortgage payments is a private individual rather than a traditional lending institution like a bank, credit union, or mortgage company. The mortgage note, then, is basically a lien against the property that is, in turn, the collateral for the note. Sometimes, though, the holder of the note is better off with a large lump sum instead of the spread-out payments. So let’s look a little closer at what a mortgage note is and how to sell yours in Phoenix.

Why Private Mortgages

The two main reasons for the rise in private mortgages are stricter lending requirements and not-so-good credit scores – mostly as a result of the recent recession. In addition, during that recession, quite a few properties were abandoned and, as a result, became distressed, which made it nearly impossible to get traditional mortgages to buy them because they wouldn’t have passed the inspections. Private lenders then stepped in to fill the gap.

Risks of a Mortgage Note

Although a mortgage note can be an easily liquidated asset, there are certain risks. First, because the note holder is acting in the same role as a bank, that person assumes the same risks a bank would. There is, of course, the benefit of earning interest, but there is always the potential for the borrower to default.  So here are a few questions you need to ask if you’re trying to decide between continuing to hold the note or sell it in Phoenix:

  • Is the property likely to depreciate owing to neglect or a bad location?
  • Will your financial situation be threatened if the borrower is late on payments or defaults entirely?
  • Is the borrower (or homeowner) carrying the proper insurance so that you will be covered in the event of some disaster?

Why Sell Mortgage Note

One of the great advantages of owning a private mortgage note is that you can usually easily liquidate it by selling it to a company that specializes in such purchases. You can sell the entire note or a portion of it depending on your financial need. Common reasons for selling a  mortgage note include:

  • Getting out from under risk and worry of the borrower defaulting
  • Desiring a different investment
  • Paying college tuition
  • Divorce requirements
  • The need to divide an estate
  • Needing capital to start a business

How to Sell Mortgage Note

Owing to the increase in private mortgages, there are now many investment businesses in the secondary mortgage note industry willing to purchase your mortgage note. If you do decide to sell your mortgage note in Phoenix, here’s what the process involves.:

  • Gather all the information and documents concerning your note: property information, promissory note, interest rate, payment history, borrower’s creditworthiness, and so on. The more information and documentation you can assemble, the better off you’ll be.
  • Provide all the pertinent details to a company that purchases mortgage notes and get a quote.
  • Consider the quote, accept or decline the offer, and submit the contract.
  • Wait for the investment company to complete the due diligence and be prepared to verify previously submitted information.
  • Close the deal and receive payment for the contracted amount/portion of the mortgage note.

There actually are no constraints on what amount of the note you can sell. It can be the entire mortgage note, a specific amount now and then payments again later, or a percentage of each scheduled payment. So selling a mortgage note in Phoenix is fairly complex and can be somewhat confusing.  However, we can provide the assistance you need.

Send us a message or give us a call today to learn more! 866-488-9923!

Explore more

July 30, 2021
How to Sell Your House Webinar With Martin Boonzaayer
Read More
July 21, 2021
How to Sell Your House in Arizona

Arizona is a hot spot for people looking to buy a house. The state has the second-highest rate of homeownership in the country, with two-thirds of homes being owner-occupied. It also ranks near the top when it comes to home price growth, so if you're considering selling your house, now may be a perfect time!  […]

Read More
June 10, 2021
When is the right time to contact a Senior Advisor?

A Guest Post From OasisAdvisor When it comes to such an important aspect in your life or the life of a senior you know and love, you want a trusted advisor to guide you every step of the way. Being proactive and planning is the best approach. We want you to know that we understand […]

Read More
June 2, 2021
Things You Can and Cannot Do When You Have an Exclusive Contract with a Real Estate Agent?

Things You Can and Cannot Do: When You Have an Exclusive Contract with a Real Estate Agent? Having an exclusive contract with a real estate agent leads to numerous benefits, some expected and perhaps even unexpected. However, when a real estate agent asks you to sign an exclusive contract with him or her, he or […]

Read More
The Trusted Home Buyer Logo
Copyright © The Trusted Home Buyer
WE BUY HOUSES IN: