Mortgage Note Buyers

When a mortgage note is set up, the initial lender is the owner of the note, and the person agreeing to the loan is the borrower. Once a note owner decides to sell to a note buyer, the buyer becomes the new owner.

There are numerous companies that focus solely on purchasing mortgage notes from lenders. When someone sells a mortgage note, the payments from the borrower do not increase or decrease in price, but they are sent to the new note owner.

Both traditional and private mortgages include a mortgage note, but traditional mortgage payments are sent to a bank. This differs from private mortgage payments, where the borrower instead pays a private person or institution.

The owner of a private mortgage note can decide to keep the note and receive the monthly payments from the borrower or sell the note to a mortgage note buyer. If the owner of the private mortgage note decides to sell it, the amount of money they will receive varies on a few different factors.

Selling a mortgage note can be beneficial when the seller is looking for extra capital for a business venture, a separate investment, a college fund or any other financial investments. Although they can be sold for almost any purpose, it’s often used when extra cash flow is needed.

When looking to sell a mortgage note, there are a few steps that can be taken to help make the process as simple as possible.

Additionally, the mortgage note seller can decide on the selling terms. Some selling term options include full purchase buy-outs and partial purchases.

Individual investors, businesses and institutions can purchase private mortgage notes. Sellers should explore their options to make sure they are choosing the best company for their situation.

If you decide to work with a note broker, versus a direct note buyer, the first thing you should do is verify that the note broker is licensed and legitimate. Although some states do not require a special license, many states do require these businesses to obtain certified real estate broker licenses.

The U.S. Securities and Exchange Commission recommends calling your state securities regulator to confirm that the person or business is licensed. You can also verify the license by checking your state’s Bureau of Real Estate website. You can also check to see if the broker has had any disciplinary action taken against them.

Aside from verifying a note buyer’s legitimacy through the Bureau of Real Estate, there are other signs of a good buyer to consider.

Choosing a mortgage note buying company can be easy when you know what to look for. Look for a company that is responsive and can answer all of your questions. If the company you’ve chosen to work with isn’t providing you with enough information, explore other options and shop around to find the best mortgage note buyer for your needs.