Many mortgage note or trust deed holders don’t realize the options they have with their Mortgage Note or Deed of Trust. First of all, you can sell it for all cash. Secondly, you can sell part of the note or trust deed structuring the sale in a manner that accomplishes their specific goals. As I get a lot of questions about the process of selling a mortgage note or selling a trust deed, I have put together a list of Frequently Asked Questions that may help. Some answers may surprise you. (Please note that my answers are for our company and may not be true for some note buyers.) The FAQs and answers are as follows:
1. What are the advantages of selling an owner financed mortgage? – The two biggest advantages are a) Accessing the cash now for critical investments or expenses and b) Eliminating the hassles of managing the borrower’s payments and reporting.
2. What are the criteria for how much I will receive for my private mortgage? There are 5 main factors. They are: Equity in the property, seasoning on the note, the interest rate on the note, the time left on the note and lastly the credit of the borrower.
3. Will an appraisal be necessary for me to sell my private note? Yes to determine the value of the security.
4. Will you need to check the buyer’s credit? Yes, it is a very important factor in determining the lump sum payment for your private mortgage.
5. How long does it typically take to receive my lump sum payment for my owner financed mortgage note? Typically 1 to 2 weeks for our company. I can’t speak for others.
6. Do I have to tell the buyer I’m selling the note? Yes. That’s the law.
7. How can I be sure the mortgage note has a clause allowing me to sell it? Just look at the original note or we could look at it for you but every note I’ve seen allows for the sale of the note. It’s standard in most mortgage agreements.
8. Can I sell my private mobile home mortgage? Yes, if it includes the land.
9. Can I sell a private mortgage on raw land? Yes, with or without improvements.
10. Can I sell a mortgage on a piece of commercial property? Yes.
11. What if I don’t know the credit of the borrower that I gave an owner financed mortgage? You can ask for a quote based on your best estimate and adjust (up or down) the final payment after credit is pulled.
12. Can I sell a Land Contract? Yes
13. Can I sell a Deed of Trust? Yes.
14. I would like to sell my mortgage note payments for some extra cash but I am afraid of loosing all the monthly income? Not to worry. Some note buyers (including us) can make a partial purchase of your private note for just the amount you need.
15. Is there a minimum mortgage size for home note buyers to buy? Ours is $30,000.
16. Can I sell a condo mortgage note? Yes.
Finally, don’t assume you can’t get the cash you want from the sale of your mortgage note or trust deed. There are a number of ways to structure a note sale so as to accomplish your goals. Quotes are free from most legitimate note buyers.