Planning in the New Year – Is It The Right Time To Sell A Mortgage Note?

It wasn’t long ago that we celebrated the coming of new year –  we watched the ball fall, made some resolutions and some noise, and toasted to 2013.

Starting fresh is what the new year is all about. While we do reflect on the past, for example how we capped off 2012 with a tumultuous presidential election and concerns about the fiscal cliff, the new year is really more about planning for the future. As we look ahead and consider changes to come, it’s a good time to review finances and consider the best use for our investments.

The decision whether to sell all or part of a mortgage note (also often called a real estate note, deed of trust or promissory note) usually boils down to two main categories.

First: Simplifying Life

While holding a mortgage note can be a good investment and receiving monthly payments beneficial, managing the responsibilities and risks inherent to holding a mortgage note can feel burdensome at times. If you find any of the below to be stressors, it may be a good time to consider selling your mortgage note:

1. Managing payments, insurance, and taxes for your mortgage note.
2. Planning your estate for heirs.
3. Settling finances in the event of a divorce.
4. Assuming the risk of non-payment of a mortgage note or bankruptcy of the payer.
5. Unexpected changes due to the divorce or death of the payer.
6. Worrying about default and foreclosure.
7. Concerns with the real estate property becoming devalued.

 Second: Cash Requirement

There is no question that life changes, planned or not, often come with expenses. Selling real estate notes is a fairly simple way to raise a lump sum of cash quickly, and can be significant depending on the value of your mortgage note. Types of life events that may warrant selling a mortgage note are not limited to, but include the list below:

1. Covering medical expenses
2. Paying for college tuition.
3. Planning a wedding and/or starting a family.
4. Buying new real estate.
5. Making a career change and/or investing in a new business.
6. Transitioning into other investments or reinvesting at a higher interest rate.
7. Purchasing a vehicle and other high cost items.
8. Funding travel plans.
9. Managing retirement expenses.

If you are in the process of deciding if selling a mortgage note makes sense for you, you may want to contact a  reputable mortgage note buyer for further advice and information.