Selling mortgage notes

Get offers from note buyers

Note buyers are investors who pay you a lump sum now for the payments still owed on a note. They range from individual investors to funds and larger institutions, and each one buys only certain kinds of notes. To see what your note could bring, start with a no-obligation note review. Then get offers from note buyers whose rules fit your note, and compare them side by side.

Get a no-obligation note review

What a note buyer does

When you sell a property and let the buyer pay you over time, or lend money backed by real estate, you hold a note. The note is a written right to future payments, so it can usually be sold.

A note buyer pays you cash today in exchange for those future payments. After closing, the buyer steps into your place. The borrower sends payments to the buyer, or to the buyer's servicer, instead of to you.

Note buyers look at many kinds of paper: mortgage notes, owner-financed notes, land contracts, deeds of trust and other real estate notes, promissory notes and business notes. Notes secured by real estate draw the most interest.

Who buys mortgage notes: the main types of note buyers

No type of buyer is better than another for every note. They differ in how much they buy, how they decide, and how they close. Here is how each one usually works.

Individual investors (private note buyers)

Private note buyers are individuals who buy notes with their own money. Some invest through a self-directed retirement account. Many buy one note at a time and look at each file closely.

Often a fit for: a single private mortgage note, a smaller balance, or a note with an unusual feature that a larger buyer might pass on.
Keep in mind: each person has a limited amount to invest and their own comfort zone on states and property types. Ask whether they are buying with their own funds or plan to pass the deal to someone else.

Note-buying companies and investment funds

These are companies that buy mortgage notes as a regular business, and funds that pool money from several investors. They usually have a written "buy box": the lien positions, property types, states, balances and payment histories they will consider.

Often a fit for: notes that match their buy box, single notes or small groups of notes, and sellers who want a set process with clear steps.
Keep in mind: if your note falls outside the buy box, the answer may be a quick no, even when another buyer would be interested.

Institutions

Banks, insurance companies and large asset managers also buy loans. They mostly trade large pools of loans with other institutions.

Often a fit for: large portfolios with standard loan files.
Keep in mind: they rarely buy a single private note from an individual. If you hold one note, the realistic buyers are usually private investors, note-buying companies and funds.

Where note brokers fit

A note broker usually isn't a buyer. A broker gathers your note's details, shows it to buyers whose rules fit, and helps you compare their offers. Read note broker vs. direct note buyer to see which route suits you.

What note buyers look at

Every buyer asks the same basic question: how likely are the remaining payments to arrive, and what happens if they stop? These are the things that shape the answer.

Payment history. How long the borrower has paid, and how reliably.
Equity. The property's value compared with what's still owed.
Rate, payment and time left. The size and length of the payment stream, plus any balloon.
Lien position. Whether the note is in first position or behind another loan.
The borrower. Credit and stability, within what the law lets a buyer check.
Property type and location. Each buyer has its own preferences and state rules to follow.
Paperwork. The signed original note, the recorded mortgage or deed of trust, and any earlier assignments or allonges. See the documents checklist.

How offers from note buyers work

A buyer works out what the remaining payments are worth today, at the return it needs for the risk. That figure is usually less than the unpaid balance. You can test the math yourself with the note value estimator, and read more in how notes are priced.

First look. The buyer reviews the basics: note type, state, balance, rate, payments left and payment status.
Preliminary offer. If the note fits, the buyer names a price and the conditions it depends on. This number can still change.
Due diligence. The buyer checks the documents, title, property value and payment record.
Final written offer. The price and terms go into a purchase agreement. Read it, and consider asking an attorney to review it.
Closing. A title company, escrow agent or attorney usually handles it. You endorse the note, sign an assignment for recording, and the borrower is told where to send future payments.

Many buyers will also look at a partial note sale. In that case they buy a set number of upcoming payments, and the rest come back to you later.

Hypothetical example: Sam sold a house and carries the note. One buyer offers to buy the whole note. A second offers to buy only the next few years of payments. A third names a higher price, but it depends on an appraisal that hasn't happened yet. The biggest headline number isn't automatically the strongest offer. Sam compares the cash each one leaves after costs, the conditions, and what Sam keeps afterward.

How to compare note buyers

Put every offer side by side, in writing, and check the same points for each one.

Net cash to you after every cost, not the headline price.
Conditions. What has to check out for the price to hold, and what could lower it.
Full or partial. How much of the note each offer covers.
Costs. Who pays for title work, the property valuation, recording and transferring the servicing.
Closing. Who closes the deal. An independent title company, escrow agent or attorney is a good sign.
Timing. How long from a signed agreement to funding, and what usually causes delays.
Whose money. Whether the buyer is funding the purchase itself.

Be careful with anyone who wants money from you before closing, asks for the original note before there's a signed agreement, or won't put terms in writing. Our guide on how to choose a mortgage note buyer or broker lists the questions to ask and more red flags.

How to get offers from note buyers here

CashForMyNote.com doesn't buy notes. It's an information and referral site. Here is how a no-obligation note review works:

Answer four quick questions on the review form: note type, property state, rough balance and payment status. Add more detail if you have it.
Consent to share. If you check the consent box, your request goes to our affiliate, who checks which buyers your note fits.
Compare and decide. If buyers are interested, you compare their terms. You never have to accept an offer.

Never send Social Security, bank account or card numbers through the form.

Questions

What is a note buyer?

A note buyer is an investor or company that pays you a lump sum for the payments still owed on a note, such as a mortgage note, land contract or business note. After the sale, the borrower pays the buyer instead of you.

Who buys mortgage notes?

Mostly private investors, note-buying companies and investment funds. Banks and other institutions tend to trade large pools of loans and rarely buy a single private note. Each buyer has its own rules about lien position, property type, state, balance and payment history.

What do companies that buy mortgage notes look for?

They look at the borrower's payment history, the equity in the property, the rate and time left, the lien position and the paperwork. They also check whether the note fits their own buy box, such as the states and property types they work in.

Who are private mortgage note buyers?

Private mortgage note buyers are individuals who buy notes with their own money, sometimes through a self-directed retirement account. They often buy one note at a time and may consider notes that larger buyers pass on.

How much will a note buyer pay for my note?

It depends on the note. A buyer prices the remaining payments at the return it needs for the risk, so offers are usually below the unpaid balance. Payment history, equity and paperwork move the price most. Try the estimator with your own numbers, then get offers from note buyers to see real terms.

Can a note buyer buy only part of my note?

Often, yes. In a partial purchase, the buyer pays for a set number of upcoming payments. After those are paid, the remaining payments come back to you.

Is CashForMyNote.com a note buyer?

No. CashForMyNote.com is an information and referral site and doesn't buy notes or make offers. With your consent, your review request goes to our affiliate so note buyers can look at your note.

Do I have to accept an offer?

No. A no-obligation note review doesn't commit you to sell. You can compare offers, ask questions, or walk away at any point.

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