Mortgage note owners wanting to sell have two options: sell the entire note or sell a portion of the payments. Choosing between the two depends on the needs of the seller. We explore the reasons to pick each and highlight how to choose which is best for you.

Selling Your Note on the Secondary Market

Part of the advantage of mortgage notes is that they are an easy-to-liquidate asset with the selling process only taking a few short weeks. An active secondary market means note holders can sell their note to investors at a mortgage note buying company instead of waiting 30 years to receive the full amount of the sale.

Types of notes that can be sold:

  • Private Mortgage Notes for Residential Real Estate
  • Private Mortgage Notes for Commercial Real Estate
  • Business Notes
  • Deeds of Trust
  • Land Contracts
  • Bonds for Title

If you don’t see your promissory note on this list, don’t dismay. Our representatives will consider any type of note.

Full Sale Option

When you call to get a quote for the sale of your note, one of the first questions the representative will ask is whether you’re interested in selling all or just a portion of your note. If you own a deed of trust, land contract or mortgage note, you can sell the entire payment stream for a lump sum in as little as 30 days. The majority of note sellers go with this option.

Many choose to sell their mortgage note to pay off debts, fund a new real estate investment or start a business. Others used a mortgage note to offer seller-based financing on a property that didn’t qualify for an FHA loan and intended all along to sell the note once the new homeowner demonstrated a solid payment history.

It’s natural to feel concern about your property owners during this process, but when you work with a reputable company, there’s no need to. They aren’t disturbed during the selling process. And selling your note doesn’t change their interest rate, payment schedule, amount they owe, or any other terms of the loan. They simply pay the same amount to a new company.

Partial Sale Option

Selling the full mortgage note isn’t your only option: Mortgage note owners can sell a portion of their payments in exchange for a lump sum. Selling a portion of the monthly payment can be a great way to keep an income stream while still accessing the cash you need.

In a partial sale, the mortgage buyer and note owner establish a partnership with a third-party servicing company. The property owner makes payments, say, of $1,000, to the third-party company. The company, in turn, each month sends the mortgage note buyer his or her portion and the original mortgage note owner his or her remaining amount.

Choosing What’s Best for You

One of the biggest factors in determining whether to sell all or a portion of your mortgage note is the amount of money you need. Most people begin the selling process because they need to access money quickly, and both options offer that. The biggest question is how much money.

If you don’t mind managing the payment stream and only need to access some of the capital within the note, then selling a partial payment might be for you.

People Choose to Sell a Portion of a Note Because:

  • They need money for a major family life event, such as a birth or wedding.
  • They have a once-in-a-lifetime opportunity to travel.
  • They want to Invest in business but maintain some stream capital to manage ongoing expenses.

On the other hand, if you’re looking to get rid of your mortgage note or need a significant amount of cash, a full sale option might be the one for you.

People Choose to Sell the Entire Note Because:

  • The note is part of an estate being liquidated.
  • The only way to sell their home was a seller-backed financing deal with a private note.
  • They want to jump start their retirement.

Deciding to Sell Remaining Payments

Some note owners sell a portion of their mortgage note only to realize they need more capital. If  that happens, note owners are able to sell the remaining amount of payments left on the note.

This isn’t uncommon and does not over-complicate the process. Even if you’ve worked with another company to sell a portion of your mortgage note in the past, we are happy to offer a free, no-obligation quote on the remaining payments.