Original Note Balance: $95, 000

Category: Finance, Mortgages.

All mortgage note holders want to know more about selling their mortgage note. Well, the popular way to get a lump sum of cash for your future payments is by using a mortgage note buyer.

Don' t you? But beware! It may seem scary or challenging, but truly it is not, unless you do not know the answer to this question. Most people don' t realize they have different creative options when using a contract buyer that can keep them from getting the most money for their owner- financed mortgage note. Can I receive cash now and still hold part of the note? At first glance, this may seem obvious that this is the best choice because it will get you the most money up front.

In other words, do I have to sell all of my note at once? For some people, it is. If you need or want a large all cash payment and want to be out of the deal, rid of headaches and worries of a default buyer, avoid destruction of property, and would like, taxes and insurance a larger sum of money now instead of collecting small monthly checks, then a full sale is best. When it comes down to it, it is up to you and your needs. But let's take a look at some more needs. Maybe you just want to lessen the amount of strain or burden of carrying the note and would like to sell just a portion of each monthly payment. If you are just looking to get a larger down or some money to take care of some immediate needs or pleasures, then a partial payment may be better.

Then a split payment option will be better for you. (This way you can go on vacation, buy a new, consolidate bills car. ) What is a partial? There are many times when this may make sense. A partial is the purchase of a portion of an income streams remaining payments, or a purchase of a portion of a specific payment, or any combination thereof. Let's say that you have a new note and it has not been seasoned( length of time that a note has been in place and paid on) , it has little or no down payment, and has poor credit by the payer. It will get you more money in the long run because the mortgage note buyer would have less risk should the buyer default on the note. In this case, it would be better to sell only part of the future payments.

Then after the note has experienced seasoning you could sale the rest of the payments at a much higher percentage. Down payment: $5, 000. Let's look at an example of this: Sales price: $100, 000. Original note balance: $95, 000. Seasoning: 1 month. Payers credit: poor.

Appraised property value: $100, 000. Interest: 10% Remaining payments: 359. Term: 360 months. This is a low quality note because the buyer is not putting much money down, the pay back period is very long, and the buyer's credit is bad. Let's say you sold the first 120 payments( 10 years) for$ 51, 00After the 120th payment, the contract would be returned back to you. But you could still make out like a bandit by selling it as a partial.

The balance owed to you would be$ 86, 391You would then start to collect the payments from then on. Sales price: $100, 000. Let's see how this looks. Down payment: $5, 000. Contract written for 30 years@ 10% Monthly payment: $8369. Original note balance: $95, 000.

Note buyer purchases first 120 payments for: $51, 000. Total money to you: $142, 3912( including interest) . Total cash to home seller$ 56, 000. (down payment+ cash from note buyer) After 120 payments contract is returned to you with a balance of$ 86, 3912. Not shabby for a house that sold for$ 100, what is a, 00 So Split? If you' re getting to the point where you would like to enjoy some of the finer things in life, while still receiving a good monthly income, then a split payment is a great choice for you. A split is a purchase of a specified monthly amount.

For example, if the monthly payment on a seller- financed note is$ 1, 000, we could purchase$ 200, $500, $750, etc. of the monthly payment. All in all, each situation is different and may need to be tailored differently to meet your needs. This will allow you to get cash now and then still collect a monthly income from the note. I can' t say exactly what you will get for your individual situation, but I can say that you should walk away happy. Selling your mortgage note should be much easier and more profitable now that you are armed with some creative options.