5 Things To Know When Selling Your Note 

  1. Private Mortgage Notes are sold at a discount. Notes are purchased anywhere from 50-95 cents on the dollar. Notes are bought at a percentage of the Current Balance. Future interest is not a part of the equation.

  2. It is very helpful to know the credit score of the borrower. The credit score of the borrower is one of the factors considered when determining the value of a note.

  3. Another factor considered when determining the value of a note is the Loan-to-value (LTV). The LTV should be no higher than 80%, the lower the percentage the better. The LTV can be calculated by the balance of the note divided by the value of the property.

  4. Don’t sell your entire note if you do not need all of the money from the purchase. If you need a smaller amount of money, consider a partial. A partial is when you sell a certain number of payments but not the entire note.

  5. Most note purchases include the Noteholder paying closing costs. If someone offers you a price which includes the closing costs, be aware that they have deducted what they estimate the closing costs will be from the offer price. If you receive an offer stating the Noteholder pays closing costs, then you will pay the ACTUAL costs not an ESTIMATED amount. The actual amount is most always less than the estimated amount.

Selling My Note: What Happens To My Payor

Sell Your Note