Seller Note Education
What makes a good note?
If you are thinking of selling a note, it’s probably a good idea to see if the note is worth anything and to understand the criteria of that make the value of mortgage notes. For you the seller, a good note would mean a great price, and for us the buyer, a good note would mean a stable investment.
Let’s see how we determine the quality of a note:
How many payments are left on the note and the worth of the remaining payments. Multiply the number of payments remaining by the amount of each payment to be collected.
Banks and note buyers purchase notes at a discount of that amount. In offering a lump sum up front that is of course smaller than the total amount owed to the seller, the seller gets to have a cash lump sum now rather than a long-term profit strategy.
In addition, banks and note buyers consider the fact that there is always a risk of the purchaser defaulting on their payments into the discounted price. A larger factor of the price of the note is taken into consideration and that is the value of the collateral. A note that is backed by real property is worth more to the investor because in the event of a foreclosure or repossession, there is a much higher chance that the investor will be paid back in full. Having the note be well seasoned is another valuable consideration, when the purchaser has been a history of making on time payment for a certain amount of time, there is lower risk for the note buyer. The credit score of the purchaser is something else that might be taken into consideration as far as the note being paid back in full.
Your ideal note to have for sale is one that has all of these criteria. A note that has quite a high remaining balance with a valuable collateral that has been seasoned for a while. To get exact quote for your note, submit a Quick Quote request form and you’ll have a real quote within 2 working days.
Selling Less-than-perfect Notes
Not all notes are perfect notes, but they can still be sold. If a note was a one time delinquent or the purchaser who had at one time fallen on hard times and had missed payments, only to rebound and has now for a certain period of time had timely payments with no issues, and the payments are caught up, Jade Funds may purchase the note. This is looked at on a case to case review.
If Jade Funds is not able to purchase this type of note, we will recommend to you a note buyer who will.