Owning a mortgage note can be a good of long-term investment. As long as the monthly payments on the loan are being made, the mortgage note owner has a reliable source of income. Because of this value, a mortgage note can be sold for immediate cash. There are a lot of people who are willing to buy a mortgage note, but finding someone that will give you a fair price can be tricky. Here’s how to get the best price when selling your mortgage note.
As with any situation where someone is selling long-term payments for a lump sum, there is the potential for the seller to get the short end of the stick. The lump sum given for a mortgage note has to lower than the value of the long-term payments. However, many mortgage note buyers try to take advantage of the situation by offering lump sums that are below the fair value of the mortgage note. Sellers who don’t the true value of their mortgage note on the market, or people who are in a hurry to sell, can end up accepting a price that’s too low. To get the best price when selling your mortgage note, you need a buyer you can trust. Mountain View Investors is a private mortgage note buyer that prides itself on offering good and fair deals to people wishing to sell a mortgage note.
To get the best price for your mortgage note, be sure to go through a mortgage note buyer and not a mortgage note broker. It may seem like a minor difference, but this choice can greatly affect the final amount the seller gets for their mortgage note. Brokers are individuals who connect mortgage note buyers and sellers, but aren’t the ones who actually buy the notes. This means that any deal that goes through a broker has extra fees that come out of the amount the seller receives. The commissions can vary, but mortgage note sellers can easily lose 5 percent or more on the final price if they choose a mortgage note broker over a buyer.
Another way to maximize the amount you get when you sell your mortgage note is to choose a buyer that offers creative options. Selling a mortgage note isn’t an all or nothing proposition. When working with a mortgage buyer that has creative options, a seller can choose a deal that offers them the highest price. For example, a seller who doesn’t want to sell their entire mortgage note can make arrangements to sell some of the payments over the next few years. As a private mortgage note buyer, Mountain View Investors works personally with mortgage note sellers to create offers that fit their needs and are mutually beneficial.
Mortgage note sellers should also take actions that can make their contract more attractive when they bring it to market. There are a lot of factors that determine the market value of a mortgage note. Some of these things can’t easily be changed, but working on the other factors can greatly improve the amount you receive. Contracts that include a building and land are more likely to be approved and get higher prices. This is also true for notes with clear terms in the deed and promissory note.
Choosing the right time to sell a mortgage note is also important. A low interest rate makes mortgage notes more valuable on the market. Similarly, selling your note when the borrower has been regularly making their payments will garner a higher price than try to sell it once the borrower has missed a few payments. This doesn’t mean it’s impossible to get a good price for a mortgage note that isn’t perfect. Mountain View Investors can work with the holders of “ugly” mortgage notes to give them the best offer possible.
If you’re curious about the value of your mortgage note, visit the Mountain View Investors website or call us at 505-404-1131 to get started.