How to Find a Mortgage Note Buyer and Sell a Mortgage
If you sold real estate and accepted a mortgage or land contract for it, you can sell the mortgage to a mortgage buyer and receive cash now in a lump sum, rather than waiting for monthly payments. Mortgage buyers purchase regular or balloon mortgages. You can even sell just a part of your mortgage for cash now and continue collecting payments later. Mortgages notes or land contracts for houses, land, commercial or industrial property, condos or any kind of real estate can be sold.
If you sell all of your mortgage note to a buyer, the buyer pays you a lump sum and assumes all the future risk of receiving monthly payments, so you no longer need to worry about not collecting, bankruptcy or foreclosure on the part of the person paying you.
With a partial sale, you can receive a lump sum in exchange for some of the payments, but continue to collect payments later. If you sell part of a balloon mortgage, you can sell all of the monthly payments and part of the balloon payment, and receive the rest of the cash from the balloon.
Decide whether selling your mortgage note is the best option, and whether you want to sell it in full or part. The price you'll receive depends on several factors, including the credit-worthiness of the person making payments, the amount of equity he or she has in the real estate, and the interest rate. A mortgage with a comparatively high interest rate, a high borrower's credit score, and a loan that's currently 70 percent or less of the real estate's value, may sell for close to the amount of principal due. A mortgage that ranks lower will be discounted accordingly.
Search online for "mortgage buyers" or contact local real estate professionals to find contact information of buyers. What you'll often find are mortgage note brokers, who will offer your mortgage to several different actual buyers and provide you with the highest quote. While that's good, you'll also want to compare offers and terms from different brokers, to make sure you get the best deal. Check out the ones you're interested in to make sure they're licensed and don't have an excess of complaints either online or with the Better Business Bureau.
Gather the documents you'll need, including your buyer's information and the amount and terms of the mortgage. Request offers from several mortgage buyers or brokers. When comparing offers, make sure you understand the details of the offers, such as who pays what costs, and who will be responsible for costs if the sale fails after an appraisal or title search.
If you accept an offer, fax or mail the documents that are requested. The mortgage buyer will pay for an appraisal and title inspection, which may take about thirty days, and at the end of that time, if all goes well, the company will send closing documents to a local title company.
Visit the local title company, sign the documents, and you'll receive your lump sum payment from the mortgage note buyer.
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