California Mortgage Buyer
A California mortgage buyer is a company or individual that buys mortgage notes (more correctly called real estate notes or deed of trust notes). A real estate note, or mortgage note, is created when a property is sold using owner financing. That property, which could be a house, a commercial building, or just plain land, is the collateral for the transaction. Generally, the buyer puts in a down payment and both parties agree to certain terms and conditions, all of which are completed by a competent attorney or title company. Once everything is set up and the note holder is receiving payments, that individual may choose to sell all or part of the note to a California mortgage buyer.
If you are considering selling a property using owner financing and creating a real estate note, there are certain things to keep in mind both to protect yourself and make your note more marketable should you ever decide to sell it. The most important elements are the amount of equity in the property and the credit rating of the payer. Equity refers to the difference between the property value and how much is owed in total. It provides a buffer for the holder of the note. For example, if a property is worth $200,000 and $160,000 is owed by the payer, then there is $40,000 of equity. The note holder or note buyer like to see plenty of equity because it lowers the risk and provides some safety margin in case the payer ever stops making payments and/or damages the property.
Similarly, a payer with a good credit score is expected to have a higher probability of making the payments on time. Good credit reflects that person’s ability and willingness to pay their bills on time. Of course, credit scores fluctuate over time, which is why a good mortgage buyer always goes deeper than just looking at the FICO score.
Other important factors that determine the value of a note are the type and condition of the property, the prosperity of the immediate area, the terms written on the promissory note, and whether the documents were properly prepared. If one of these factors is weak, it can sometimes be offset by strong factors in other areas.
If you are considering selling your note to a California mortgage buyer, be sure that the individual with whom you are speaking is competent, experienced, and licensed as a real estate broker by the state. You can learn more about this by viewing the You Tube videos on the website of Seascape Capital.