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Do you want to create a mortgage note that is safer than most and therefore more profitable?  If you someday decide that you want to sell a mortgage note in Maryland, would you want to get the best price and have the note sale process go quickly?  Nearly anyone holding a mortgage note or considering doing so would say “yes.”  Read on for tips to help you with these.

 

If you are in the early stages and have not finalized the transaction and note, try to follow these guidelines:

 

  • Sell to someone with at least a decent credit score and regular income.  People with poor credit are often those who either cannot or will not make on-time payments.
  • Get at least a 10% down payment – more if the buyer is not going to live there.  Having a large down payment shows that the buyer has skin in the game and gives you some financial buffer in case there are ever payment issues.
  • Set up an interest rate that is higher than that charged by banks and that reflects the amount of risk that you are taking.
  • Use a term length that fits with your expected life span.  For example, if you are 70-years-old, do you really think that setting up a 30-year term is ideal?
  • Have a professional prepare all of the transaction documents.  Normally, this professional would be an attorney or title company.  By having proper documents at the beginning, you can avoid a whole slew of issues later on.

 

Sell a Mortgage Note

Perhaps your situation has changed or maybe you never really wanted to carry a note.  If you followed the guidelines above, your note will be more marketable and more valuable to a potential note buyer.  This will result in you getting more money for your note.

 

When looking to sell your note, be sure that the note buyer is competent and ethical.  Things to look for are:

 

  • At least 5 years of experience in buying notes
  • An A+ rating from the Better Business Bureau
  • Possessing a real estate license in their home state
  • Able to provide testimonials or references
  • A good listener who is customer-service oriented

 

Once you have found a good company to which you can sell a mortgage note, the normal steps for selling your note are:

 

  1. Send copies of requested documents and information about the payer to the note buyer
  2. The note buyer will review the documents and order a drive-by appraisal.  This is usually at the note buyer’s expense, and takes 7-10 days.
  3. The note buyer will next order a title commitment to make sure that the property taxes are current and that there are no other liens against the property.  This commitment is also usually paid for by them, and takes a week or a bit more.
  4. Once the note buyer is satisfied with the above, they will send assignment documents to you.
  5. You will sign the documents and return them with your original note and mortgage.  This step can either be handled directly with the note buyer or buying using the services of a title company.
  6. Within 1-5 business days, you will receive your funds via wire.  From Step 1 until the funding usually takes about 4-5 weeks.

 

Seascape Capital has an A+ rating from the Better Business Bureau and has been in business since 2002.  Seascape has both bought and brokered numerous notes in Maryland.

 

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