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What is A Mortgage Note and How To Sell Yours in Orange County

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 Orange County.

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 Orange County:

  • 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 Orange County, 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 Orange County 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! 949-625-4533!

Joe

Broker/Realtor/Investor/Mentor (41 years experience) Specialties: Buyer's Agent, Listing Agent, Foreclosure, Short-Sale, Property Management, Landlord I'm a Full Time Real Estate Professional, house flipper and mentor to many of my clients. I am here to help you get top dollar for your home or get you the best price for a home that you are going to live in. I have over 40 years of real estate experience for you to draw on and actively list and sell over 20 homes a year. I have sold over 600+ homes in the last ten years alone. I am a very skillful negotiator and will work diligently to help you realize the best possible price when buying or selling your home. With my Exclusive Home Acquisition & Sales System, I can find the Right Home for You! I have access to homes no other Realtor will show you. I can show you how to save an average of $10,000.00 on the purchase price. We will find a home that fits your needs, in a neighborhood that suits your style. If you are selling your home then I can bring all the professionals to you. I always include professional photos in ALL my listings. I have contractors standing by to assist with those upgrades if needed. I can also quickly get you ALL CASH offers for your home if you desire. My marketing surpasses all other agents. It begins with extensive internet advertising to hundreds of websites throughout the world. I do direct mail marketing for you home and also knock on doors in your neighborhood when I am holding an open house. I hold you home open to expose it to as many buyers as possible. My Exclusive program is designed to sell your home for Top Dollar in Any market. I am an experienced flipper here in Orange County and therefore can offer you my over 40 years of real estate experience. The information is available to you at no charge! If you like what you see, please call me and setup Your Free Consultation.

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