Other factors:

• Down Payment
• Seasoning
• Paperwork/documentation
• Term of the note (interest rate, term/time)

We consider many things when purchasing a mortgage Note. With any investment there are risks involved.  We look at several factors to help us determine how much we can pay when purchasing a note:

•        Buyer/Payer
•        Property or Asset, COLLATERAL
•        Down Payment
•        Terms of the Note, Interest rate, length, balloon payments
•        Performance, Seasoning, Payment history
•        Documentation (Note, Deed of Trust, Land Contract, etc)

Buyer: The buyer/payor on the note is by far the most important factor when looking at any note. They represent the primary source of repayment for your note. The borrower’s credit rating and capacity to repay weigh heavily on the amount of the discount applied to your note.

Property/Collateral: The type, location and condition of the property are all important pieces of information.  We will be trying to determine the current market value for the property that secures the note.

Down payment: This represents the amount of cash or equity the buyer has in the transaction. A larger down payment reduces the risk that the buyer will walk away from their investment. A higher down payment results in a higher value placed on your note resale value.

Interest rate/Terms: The higher interest rate, the better. Lower = bigger discount.

Seasoning/Performance: Performance takes into account regular, timely payments, as well as up-to-date tax and insurance payments. The better the note has performed over its lifetime, the more value the note will retain. If there is a history of non-regular payments, payment gaps, no payments, lapsed tax and insurance, the note is still marketable, but its lost some of its value. There are all kinds of notes from stellar to less-than-stellar.  Each note is evaluated individually when a purchase is considered.

 Documentation: In addition to the original note, all loan documentation including disclosures, title insurance, the borrower application and credit report, appraisal, etc are important factors determining the value of the note.  The better the documentation and compliance the higher the notes value, conversely the poorer the documentation the higher the discount.

There are different options we can give you when selling your note but most commonly these two options are offered:

Full Purchase: You can sell the entire interest in your real estate note and receive one lump sum payment.  

Partial Purchase: This option allows you to sell only a certain number of the monthly payments remaining on the note.  It is an excellent way to access a lump sum of cash from the note and then continue to receive payments from the note in the future.  We will fully service the note during the time we are collecting payments, relieving you from the responsibility of monitoring the payment, insurance, taxes, etc.  Once the specific number of payments are collected you may either receive the note back or sell more payments.