Selling mortgage notes

Selling a promissory note

Updated 2026-10-19

Many promissory notes can be sold, and the ones note buyers want most are secured by real estate through a mortgage or deed of trust. In that case you are really selling a mortgage note. Notes backed by other collateral get less interest, and unsecured personal notes are the hardest to sell.

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The basics

A promissory note is a signed promise to pay a set amount, with or without interest, on set terms. It can stand alone, as with a personal loan to a friend, or be backed by collateral such as real estate, a vehicle, equipment or a business. A note that meets certain legal requirements is a negotiable instrument, which makes transferring it more straightforward.

Secured vs. unsecured

	Secured note	Unsecured note
Backed by	Real estate, vehicle, equipment, business assets	Only the borrower's promise
Buyer interest	Broader, especially with real estate	Limited
Typical discount	Smaller	Larger
Key paperwork	Note plus security document (mortgage, deed of trust, UCC filing, title lien)	Note and payment record

What affects the value

Whether there is collateral, and how much it's worth compared with the balance.
How reliably the borrower has paid, and their credit.
The rate, the payment, and how long until it's paid off.
Whether the note is properly signed, dated and complete, and whether the security interest was recorded or filed.

Next steps

If the note is backed by a home or other real estate, start with the mortgage note guide or the real estate note guide. If it came from selling a business, see the business note guide. For anything else, start with the documents checklist, then request a review with the basic terms.

Questions

Can I sell a promissory note from a family loan?

Possibly, but unsecured personal notes have few buyers, and those that look will price in the risk heavily. A review can tell you whether there's realistic interest.

Does the borrower have to agree to the sale?

Usually not, unless the note itself restricts transfer. The borrower should be told where to send payments afterward. Check your note's terms or ask an attorney.

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