2018.06.14 14:19 | Sean Carter
A private mortgage note is an alternative investment product individuals may hold to earn extra income. Essentially, a private mortgage note is a mortgage where an individual receives payments rather than a bank or another financial institution.
Let’s say, for example, you are selling your home and you find a buyer. However, you discover that the buyer cannot qualify for a conventional mortgage from a private lender. You are a motivated seller, and you are looking for a way to make it work.
You may instead decide to pursue a private mortgage where the buyer pays you monthly payments. The mortgage note is the lien against the property and will stipulate the terms of the contract. Once the terms are met, the lendee will own the home outright.
You could own the mortgage note from the sale of your own home, or you may have decided to purchase a mortgage note because it is an easily liquidated asset that provides owners with many different advantages.
However, there may be a time when you decide that now is when you should sell your private mortgage note for a lump sum of cash. You may need the money to pay off your current debts, take an advantage of a new investment opportunity, or take care of an emergency problem. If this is the case, you can sell your private mortgage note.
Why Can’t I Get a Good Price on My Private Mortgage Note?
If you do decide to sell and want to know how to sell a mortgage note, please know that selling it for top dollar is not a sure thing. Just like with any other product, there needs to be favorable aspects to it in order to attract buyers. If you can’t find a buyer for your private mortgage note or you feel you are being low-balled, here are a few reasons why this could be the case:
The owner of the home has not been consistent with payments.
There aren’t enough payments left on the mortgage.
The home is in an area that is decreasing in value.
There isn’t insurance on the home.
If any of these issues are a concern, you should try to rectify them to the best of your ability. It might be a good idea also to speak with a number of private mortgage note buyers to address their concerns and offer possible solutions to get the transaction completed.