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Discover How to Sell a Mortgage Note & Create Maximum Value

How to Maximize Your Mortgage Note’s Value With Iron Clad Record Keeping

December 4, 2018
Maximize Your Mortgage Note's Value

Ok… this is ONE of the VIP tips that most note seller’s value the most. How to maximize your mortgage note’s value by simply keeping good payment records. Can’t get much easier than that can it?

Simply put, keeping a detailed, well-organized and legible payment record showing the date each payment was received, and a breakdown of the principal, interest and late charge for each amount received is important to maintaining the value of your mortgage note.

If you ever decide to sell your real estate note or contract for deed, you will be required to show the mortgage payment history to a prospective note buyer so the note buyer can verify the payment patterns of the note payor.

If the payments on a “seasoned” note, which is a note with a payment history over an extended period, have been made consistently on time, the value of the note will be greater than if the payments have been late or delinquent because the perceived risk of the note is lower.

Use the payment record sheet in the back of “The Note Holder’s Guide” to keep a record of your note payment history. If you don’t have it, click here to get the Mortgage Note Holder’s Guide. Also, make sure to print out an amortization table for your loan amount. Go to www.bankrate.com to obtain a printable amortization schedule.

Another good way to keep good record keeping of your mortgage note payment history is to use a mortgage servicer for your mortgage note. That way you’ll have a professional record of your mortgage note’s payment history. This is even better than keeping your own records so definitely consider that if you want to maximize your mortgage note’s value.

As you know by now, I’m a professional mortgage note buyer.  If you’d like to sell a mortgage note, simply get in touch through the contact me page.

Thanks for checking out this latest post from sell my mortgage note for cash

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Discover How to Sell a Mortgage Note & Create Maximum Value

How To Create The Perfect Note With 10-10-10!

December 2, 2018
Create The Perfect Note

Hey again and thank your for visiting SellMyMortgageNoteForCash.com. Today, this blog about how to create the perfect note could be one of the best blog posts ever so pat yourself on the back for reading this one.

I know I know.. you think I’m exaggerating. Well… you couldn’t be more wrong when it comes to selling a mortgage note.

The 10 – 10 – 10 mortgage note principle or what I sometimes like to call the Power of 10 is probably one of the most important factors in maximizing your note value. There’s even a video tutorial on what I mean.

In the meanwhile, let me explain What exactly am I talking about when I mention the power of 10 or more accurately 10 – 10 – 10?

The three 10s refer to the following 3 factors which play a crucial role in determining a mortgage notes value.

#1 – Down Payment

#2 – Interest Rate

#3 – Repayment Term

Here’s why the number 10 is so important when it relates to those 3 factors for a mortgage note.

In a perfect world, you would be creating a brilliant mortgage and maximizing its value if you could pay attention to the number 10 for the above 3 factors.

Here’s what I mean.

First things first, you want to create a morgage note where the buyer/borrower puts at least 10% down on the property.

Second, you would be creating a very attractive mortgage note for sale if you could get the borrower to pay a 10% interest rate.

And…

Thirdly, if you can get the term of the mortgage loan to be no more than 10 years, you have in essence hit the trifecta of creating a mortgage note with great value.

Of course it may be difficult to create a mortgage note with all 3 factors in place but if you are in a position to create a mortgage note and you want something to shoot for, always remember the 10-10-10 principle and it will always steer you in the right direction.

So there you have it. The perfect recipe to create a mortgage note of maximum value to the open mortgage note buyers out there. I hope you enjoyed this latest post from Sell My Mortgage Note For Cash.

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Discover How to Sell a Mortgage Note & Create Maximum Value Mortgage Note Safety

How To Keep Your Mortgage Note Storage To Maximize Its Value

December 1, 2018
Mortgage Note Safety

Hey again and thank your for visiting SellMyMortgageNoteForCash.com. I’m glad you’re here to learn on Mortgage Note Storage and hoping you are enjoying this tutorial series of blog posts regarding selling your mortgage note.

How To Keep Your Mortgage Note Storage To Maximize Its Value

Today we are going to talk about an overlooked aspect of creating and managing mortgage notes; mortgage note storage!

Sounds pretty boring I know. In fact, it’s a subject overlooked very often in the real estate mortgage business but it shouldn’t be because it’s pretty damn important.

Truth is, if you create a mortgage note but have horrible administration skills in regards to keeping the documents safe, you may as well not even create a mortgage note. How come you ask?

Because the mortgage note and the documents you create in conjunction with it are the documents that keep your interest and ownership safe. Without proper documentation you no longer have an asset of value but rather useless pieces of paper you can’t do anything with.

Now that you realize the documents created are where the true value lies, how should you protect them?

My advice is to keep your original note in a safe place such as a safe deposit box or a fireproof safe in your home. Make a photocopy to keep with your trust deed and other escrow papers but keep the originals in a safe deposit box.

There are two reasons for this precaution.

First, the note is not recorded in the county recorder’s office. The deed of trust is. If you lost your deed of trust, you could simply get another copy at the recorder’s office.

Second, your note is a negotiable instrument which means it can be endorsed on the back just like a check. And also just like the title of your car. You wouldn’t keep an un-cashed check or the title of your car lying around for someone else to easily steal would you?

As such, make sure you properly store and house your mortgage note paperwork as well because just like an un-cashed check and the title of your car, the documents are a very important asset.

I hope you enjoyed this post and now have a better understanding of how important it is to keep your mortgage note documents safe. Thank you for visiting Sell My Mortgage Note For Cash.

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Creating a Mortgage Note Discover How to Sell a Mortgage Note & Create Maximum Value

How to Create a Quality Mortgage Note!

November 24, 2018

Ok so you’re thinking about selling a home with some owner financing and want to create a quality mortgage note. Before you do however, wouldn’t it be nice to know what terms you should create for the mortgage note to maximize it’s value. Well, if that interests you, this blog post should set you in the right direction to create a good quality real estate note.

How To Create A Quality Mortgage Note!

As such, this could be the most important blog post of the sell my mortgage note for cash series.

So here we go!

Here are some simple steps of creating a good quality mortgage note.

Here Is A Typical Owner Financing Mortgage Note Example:

A seller has a free and clear property (meaning there are no mortgage liens against it) that he/she was trying to sell. Unfortunately, the price the seller is trying to get is $90,000 which is exactly what the home is worth per a recent market value appraisal done on the property.

The seller is having trouble finding buyers though and they are too stubborn to drop the price. Since the home appraised for $90,000, the seller refuses to sell for less than full market value. In fact, the seller might even consider renting the property out if they don’t get full value for the home.

Then one night the seller has a thought.

Hey… why don’t I make the sale of this home more attractive by offering some type of owner financing. This way, the house will appeal to a lot more buyers.

As such, the seller comes up with the following owner financing structure.

Since they know the home is worth $90,000 from a recent market value appraisal, they feel they can sell the home for maybe $10,000 more since they are now willing to offer very attractive owner financing. As such, here’s how they structure the owner financing.

Seller agrees to sell the home for $100,000.

Buyer gives seller a $10,000 cash down payment and seller carries back a purchase money Note and Deed of Trust for $90,000.

Why did the seller do this?

Because… seller was getting no action on the property when trying to sell it for $90,000 cash (the appraised value). Potential buyers would have had to pay all cash or qualify for a loan which made it un-appealing for most buyers.

So instead, seller offered to sell the property for $100,000 with 10% cash down payment to attract more buyers.

Now the seller was able to cash a quick $10,000 cash in the form of a down payment while at the same time creating a mortgage note of value with a face value of $90,000. Assuming the buyer has decent credit and the buyer continues to make payments on time on this newly created mortgage note, the seller just created something of great value.

If ever the seller gets tired of receiving monthly payments on this mortgage note, they can always consider selling this owner finance note for a lump sum of cash. These are the types of mortgage notes that get bought up constantly.

That’s it for now till next time. I hope you enjoyed this quick lesson from sell my mortgage note for cash.

 

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Discover How to Sell a Mortgage Note & Create Maximum Value How Much Is A Mortgage Note

Mortgage Note Safety – What exactly is Loan to Value and why it’s important.

November 19, 2018

Mortgage Loan To Value | Its Importance And Why

Welcome to yet another tip from sell my mortgage note for cash. What exactly is the Mortgage Loan to Value and why is it important?

Today we are going to discuss one of those acronyms in the Mortgage Note world that sometimes people get confused about.  Truth be told, it’s quite simple to understand really and if you’re going to get involved in mortgage notes in any way, it’s very important you understand this concept.

So today we are going to be talking about Mortgage Note Safety and the mortgage note’s loan to value ratio… aka LTV.

Simply put… a low loan-to-value ratio makes your note safer and increases its resale value.

But what exactly is the loan-to-value ratio…aka LTV?

The loan-to-value ratio for your note is the sum of the current loan balance(s) for your loan and all senior loans divided by the current market value of the property securing the note.

Here are 2 scenarios.

(Scenario 1)
Loan Amount – 1st Lien Position = $100,000
Loan Amount – 2nd Lien Position = $0 (n/a)
Market Value of Property = $200,000

Loan to Value Ratio = 50% (100,000 / 200,000)

(Scenario 2)
Loan Amount – 1st Lien Position = $100,000
Loan Amount – 2nd Lien Position = $44,000
Market Value of Property = $200,000

Loan to Value Ratio = 72% (144,000 / 200,000)

In general… the lower your LTV, the more valuable your note.

Why?

Simple… the lower the LTV the more equity there is in the property.  Equity is simply defined as the difference between the market value of the home and the loans against it.

For example, let’s assume the home is worth $100,000 and there are 2 mortgages against the house equaling $65,000.  In this case, the equity is simply $35,000 which is the difference between $100,000 and $65,000.

With $35,000 in equity, investing in this mortgage note is way safer than investing in one that only has $5,000 in equity.

Assume the home is worth $100,000 but this time the mortgages against the property equal $95,000. In that scenario, there is only $5,000 of equity which means… if someone buys this note, there is only a $5,000 cushion in the home’s value before the amount owed against the home is more than the home’s value itself.

That’s a scary situation for mortgage note investors because home values can easily fluctuate $5,000 but it’s harder for them to drop $35,000 in value.  As such, the note against the home with $35,000 in equity is a way safer mortgage note investment than the one with only $5,000 in equity.

In LTV terms, the safer investment discussed above has an LTV of 65% as opposed to the more risky mortgage note LTV of 95%.

In summary, the LTV of your note and deed of trust on the property (first position, second position, etc.) is critical to the note’s value.  The lower the LTV the more attractive of a mortgage note you have.

Thank you for reading and I hope this explains Loan to Value a little better.  Be on the look out for my next tip here at Sell My Mortgage Note for Cash.

 

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Creating a Mortgage Note Discover How to Sell a Mortgage Note & Create Maximum Value

What Exactly Is A Promissory Note?

November 10, 2018
Promissory Note

What Exactly Is A Promissory Note?

Hi and thank you for visiting. I’m glad you’re here because today I’m going to start my tutorial series on mortgage notes and teach you everything you would ever need to know about real estate notes, starting with the answers to the question: What is a Promissory Note? .

If you’re here, you probably already know that I’m a professional mortgage note buyer but this tutorial series isn’t about me.  Instead, it’s about you learning the ins and outs of mortgage notes in the hopes that when the time comes and you’re ready to create one, you create one of great value.

Because trust me, there are good and crappy mortgage notes out there.  The last thing you want to do is create a bad note that has no value in the market.

To help you avoid that, my plan over the next several weeks is to update this blog with a new tutorial at least every 2 weeks coupled with a video as well for a better understanding of the material.

Thank you again for visiting Sell My Mortgage Note for Cash.  Let’s get started. Here’s your first video with additional text below.

Tutorial Part 1

In today’s lesson we’re going to discuss some of the nuts and bolts of the mortgage note business. Just so you understand where you are right now, you are here because you are interested in selling a mortgage note. Perhaps you’re not even aware that you can sell a mortgage note.

If that’s true, consider yourself lucky because you are definitely in the right place if you are interested in selling a mortgage note.

Before we get too deep into the lessons, I think we need to first cover the basics. And that’s what I’m doing today with this sell my mortgage note for cash tutorial part 1 titled “Promissory Note, What Exactly is It?”

Let’s start here!

Did you know that The Promissory Note does five different things.

Defined properly, a promissory note is a written promise to pay a certain amount of money, and its payment is secured by some type of security instrument that becomes a lien on the real property.

In particular, the note specifies:

(1) the amount of the loan (principal);

(2) the interest rate (interest);

(3) the amount and frequency of payments (debt service);

(4) when the borrower must repay the principal (due date); and

(5) the penalties imposed if the borrower fails to timely pay or tender a payment (late charge) or decides to pay a portion or all of the principal prior to the due date (prepayment penalty).

Further, the promissory note identifies the person who makes the payments to you (the buyer of your property—the borrower) and the person who receives the payments (you). In a nutshell, that’s exactly what a promissory note is. Pretty simple really.

That’s it for now. Please look for my next sell my mortgage note for cash tutorial where I’ll reveal yet another important aspect of the mortgage note.

Here is investopedia’s definition of a Promissory Note.  Pretty damn boring if I say so myself.  Lol.

Thank you for visiting sell my mortgage note for cash.

 

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