Rachel Christian, Annuity.org Writer
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    Rachel Christian

    Rachel Christian

    Financial Writer and Certified Educator in Personal Finance

    Rachel Christian is a writer and researcher focusing on important, complex topics surrounding finance and investments. She is a Certified Educator in Personal Finance with FinCert, a division of the Institute for Financial Literacy, and a member of the Association for Financial Counseling & Planning Education (AFCPE).

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    Kim Borwick
    Kim Borwick, Financial Editor for Annuity.org

    Kim Borwick

    Financial Editor

    Kim Borwick is a writer and editor who studies financial literacy and retirement annuities. She has extensive experience with editing educational content and financial topics for Annuity.org.

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  • Updated: May 8, 2023
  • 4 min read time
  • This page features 9 Cited Research Articles
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How to Cite Annuity.org's Article

APA Christian, R. (2023, May 8). Mortgage Note Buyers. Annuity.org. Retrieved June 8, 2023, from https://www.annuity.org/selling-payments/mortgage-notes/mortgage-note-buyers/

MLA Christian, Rachel. "Mortgage Note Buyers." Annuity.org, 8 May 2023, https://www.annuity.org/selling-payments/mortgage-notes/mortgage-note-buyers/.

Chicago Christian, Rachel. "Mortgage Note Buyers." Annuity.org. Last modified May 8, 2023. https://www.annuity.org/selling-payments/mortgage-notes/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.

What Are Mortgage Note Buyers?

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.

Private Mortgage Note Buyers

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.

These factors may include:

  • Credit score of the borrower
  • The property’s worth
  • The amount and interest rate of remaining payments
  • The length of mortgage term
  • The down payment made on the note

How Do I Sell My Mortgage Note?

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.

These steps include:

  • Gather the necessary information from your mortgage note and familiarize yourself with the details, such as the amount, the length of time, and interest rate.
  • Explore the various mortgage note buying institutions to find which company best suits your needs.
  • Contact the mortgage note buying company and provide them with the information on your mortgage note in order to receive a quote.
  • The purchasing company will provide you with a quote based on factors such as the current market, the estimated cost of the property, the specified terms of the note, and sometimes even the rates of competitors.
  • Once you receive your quote, thoroughly read the details of the purchase.
  • Once you accept the offer, the buying company will pay the decided amount.

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

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Choosing the Best Mortgage Note Company

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.

Some criteria to look for in a mortgage note buying company include:

A trustworthy mortgage note buying company will provide you with a quote without asking you to sign something beforehand. If a company asks you to sign something beforehand, it should act as a red flag that they may not be trustworthy.
A mortgage note buyer that has more than a few years of experience purchasing mortgage notes will likely be more knowledgeable about the process and pricing than newer companies.
Although not all mortgage buying companies have accreditations, these can be helpful in identifying whether or not they have the necessary expertise in purchasing mortgage notes.
A reliable company has accessible contact information and can be contacted easily.

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.


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Last Modified: May 8, 2023

9 Cited Research Articles

Annuity.org writers adhere to strict sourcing guidelines and use only credible sources of information, including authoritative financial publications, academic organizations, peer-reviewed journals, highly regarded nonprofit organizations, government reports, court records and interviews with qualified experts. You can read more about our commitment to accuracy, fairness and transparency in our editorial guidelines.

  1. Carlson, D. (2019, December 3). Mortgage Notes Are Good Real Estate Investments. Retrieved from https://money.usnews.com/investing/real-estate-investments/articles/why-buying-mortgage-notes-are-good-real-estate-investments
  2. Consumer Financial Protection Bureau. (2022, May 16). CFPB Releases Report on Mortgage Servicing Metrics. Retrieved from https://www.consumerfinance.gov/about-us/newsroom/cfpb-releases-report-on-mortgage-servicing-metrics/
  3. Consumer Financial Protection Bureau. (2022, May). Mortgage Servicing COVID-19 Pandemic Response Metrics: New Observations From Data Reported by Sixteen Servicers for May-December 2021. Retrieved from https://files.consumerfinance.gov/f/documents/cfpb_mortgage-servicing-covid-19-pandemic-response-metrics_report_2022-05.pdf
  4. Consumer Financial Protection Bureau. (2022, March). New Data on the Characteristics of Mortgage Borrowers During the COVID-19 Pandemic. Retrieved from https://files.consumerfinance.gov/f/documents/cfpb_characteristics-of-mortgage-borrowers-during-covid-19-pandemic_report_2022-03.pdf
  5. Consumer Financial Protection Bureau. (2014). Deed of Trust/Mortgage. Retrieved from https://files.consumerfinance.gov/f/201410-deed_of_trust_mortgage_explainer.pdf
  6. Consumer Financial Protection Bureau. (n.d.). Mortgage Closing Documents. Retrieved from https://files.consumerfinance.gov/f/documents/cfpb_buying-a-house_closing-forms_guide.pdf
  7. Jacobs, H.S. (2013, April 19). What to know before buying mortgage notes. Retrieved from https://www.washingtonpost.com/realestate/what-to-know-before-buying-mortgage-notes/2013/04/18/0481cabe-a37d-11e2-be47-b44febada3a8_story.html
  8. Lawyers.com. (n.d.). The Difference Between a Mortgage Lender and a Servicer. Retrieved from https://www.lawyers.com/legal-info/bankruptcy/foreclosures/the-difference-between-a-mortgage-lender-and-a-servicer.html
  9. U.S. Securities and Exchange Commission. (n.d.). Broken Promises: Promissory Note Fraud. Retrieved from https://www.sec.gov/investor/pubs/promise.htm