5 Tips For Finding a Reputable Mortgage Note Buyer

For many property owners, finding the right company to buy your mortgage notes can be a nerve-wracking experience. In most cases, you don’t get to meet your note buyer one-on-one. Note buyers live in distant cities, so you’ll only communicate via phone or e-mail. So how can you find an experienced and reliable note buyer who will give you the best return on your investment?

To find a reputable note buyer, follow these 5 tips from Amerinote Xchange:

1. Before selling your mortgage note, it’s important to research several note buying companies to find the right one. Visit their website. If they don’t have a website, chances are they aren’t reputable. Also, many offer free consultations so you can call and inquire about the company and the note buying process. Only choose a company that is and has been in business for over five years.

2. Next, it’s important to note if you are working with a note broker, instead of a direct note buyer. The major difference is that a direct note buyer (like Amerinote Xchange) does not charge commissions when selling real estate notes, whereas most note brokering firms most certainly do. When searching for a reputable note broker, you want to be sure that the note broker business is a licensed real estate broker in its state of operation. In some states, note brokers are not required to obtain a special license. However, having a license shows that the company is an experienced and committed note brokering firm. Once you find out if a note broker has a license, check with the state’s Bureau of Real Estate to see if it has received any disciplinary action.

3. Find out if the mortgage note buyer has an A rating (at the very least) and no unresolved complaints. While it is not legally required, many leading note-buying companies are accredited by the Better Business Bureau. If the company is accredited with a strong rating and no complaints, you can feel confident that it is a reliable business.

4. Type the company’s name into a search engine to see if anything negative pops up. You’ll most likely find it here if the company has been accused of scams or bad behavior.

5. Lastly, all note holders must follow their gut feeling. Does the company seem trustworthy? Has it completely answered all of your questions? Does it seem to be looking out for your best interest? If you have answered yes to all of these questions, chances are you have found a dependable note buyer. If you don’t feel comfortable with the note buyer, then move on to another.

FAQs

What is a mortgage note and where can I find it?

A mortgage note, also known as a promissory note, is a legal document that outlines the terms and conditions of a mortgage loan. It serves as a promise to repay the borrowed amount and includes details such as the loan amount, interest rate, repayment schedule, and the consequences of default. This document is crucial because it legally binds the borrower to repay the mortgage.

Where to find a mortgage note:

• At closing: When you close on a home purchase, you’ll sign the mortgage note along with other closing documents. The lender or closing agent should provide you with copies of all these documents.
• From your lender: If you misplaced your copy, you can request another from your mortgage lender. They keep records of all loan documentation.
• Through county recorder’s office: While the full mortgage note may not be recorded, a deed of trust or mortgage, which references the note, is often recorded with the county recorder’s office where the property is located.
• In mortgage servicing documents: If your mortgage has been sold or the servicing has been transferred to another company, the new servicer should also have a copy of your mortgage note.
• Real estate attorney: If you used a real estate attorney for your home purchase, they might have copies of your closing documents, including the mortgage note.

Do I need a mortgage note investor license to sell a mortgage note?

Generally, you do not need a specific “mortgage note investor license” to sell a mortgage note that you own. Selling a mortgage note, which is essentially selling the debt that the note represents, is a right of the note holder. 

What is a note buyer?

A note buyer is an individual or a company that buys mortgage notes. These mortgage notes are essentially promises to pay back a mortgage loan, backed by the property as collateral.

When a note buyer purchases a mortgage note, they are buying the right to receive the future payments that the borrower will make on that loan. The terms of the note (like interest rate, payment schedule, and loan balance) don’t change, but the note buyer steps into the role of the lender. This means they will receive the mortgage payments instead of the original lender or note holder.

How do I choose a mortgage note buyer?

Choosing a mortgage note buyer involves researching experience, checking references, and ensuring transparency. Look for reputable buyers who specialize in residential and commercial notes. A seasoned buyer will give you the best value from your mortgage note and streamline the sale process, whether you’re selling a private note or a full mortgage.

What is a private mortgage note?

A private mortgage note is a promissory note created when a property sale is financed by the seller, rather than a bank. The note details the repayment terms and is secured by real estate. Private mortgage notes are often sold to investors in the note market to unlock a lump sum of cash.

When is it the right time to sell a mortgage note?

The right time to sell a mortgage note is when you need liquidity, want to reduce risk, or maximize value based on current market conditions. If market rates fall or you anticipate borrower issues, it may make sense to sell your mortgage note to a reputable buyer for the best return.

How do I get the best value when selling my mortgage note?

To get the best value of your mortgage note, work with a nationwide note buyer who specializes in residential and commercial notes. A strong track record in the mortgage industry, experience purchasing mortgage notes, and thorough due diligence will help ensure you receive the highest lump sum payment possible.

What is a note sale?

A note sale happens when a note owner decides to sell their note to an investor or company. Selling a note involves transferring the right to collect future payments. Whether you want to sell a private mortgage note or a business note, choosing the best mortgage note buyer is crucial for maximum value.

What’s the difference between selling to a note broker and a direct buyer?

When you sell to a note broker business, the broker acts as a middleman, connecting note holders with potential buyers for a fee. Selling directly to a nationwide note buyer or private mortgage note buyers usually gives you a faster sale and avoids paying commission on the transaction.

How does a mortgage note sale work?

During a mortgage note sale, the note owner agrees to sell the note and deed to a buyer. After a purchase agreement is signed, the buyer becomes the new note holder. The note and mortgage (or deed of trust) are assigned to the buyer, who then collects payments from the borrower.

Can I sell my mortgage note online?

Yes, many companies allow you to sell mortgage notes online. Reputable firms offer an easy digital process where you submit information about the note, receive offers, and complete a secure transaction. When choosing a mortgage note buyer online, prioritize experience, licensing, and strong client reviews to ensure a smooth note sale.

What factors impact the value of your mortgage note?

Several factors influence the value of your mortgage note, including the borrower’s credit, the payment history, the loan-to-value ratio, and the terms of the note. A note secured by real estate in a strong market is typically more attractive to prospective note buyers, resulting in a higher cash offer.

What should note holders consider before selling?

Note holders considering selling should review the loan agreement, payment history, and fair market value of the property. Understanding the attractiveness of your note will help in finding the right buyer. Private note sales and business note sales each have their intricacies, so thorough due diligence is critical.