Once you have decided to put up your mortgage note for sale, the next thing you want to do is find out how much your mortgage note might be worth. It is important to keep in mind that the value of your promissory note is largely determined by the amount of risk tied to it.
This post highlights some common factors that influence the price of mortgage notes in the real estate market.
Value of Property
When selling your mortgage note, one of the first things the buyer will look at is the value of the property which serves as the collateral on the note. The current market value of the property listed on the note will either increase or decrease the market value of your note. Real estate fluctuates over time, so make sure you factor in the current value of the property.
Equity from Buyer
Another important factor that determines the worth of your note is the equity of the property’s owner. This generally includes the amount of the down payment made and other payments that have been received from the real estate owner. The higher the equity, the lower the risk and the higher the value of your note.
Property Owner’s Credit Score
The creditworthiness of the property owner is another important factor to consider when determining the worth of your note. When the credit score is high, the value of your note goes up, and vice versa. When the owner’s creditworthiness is high, it implies that the purchasing company or individual is taking on less risk and that increases the value of the note.
Payment History on Note
The performance of the note also determines how much it is worth in the real estate market. A note is described either as being “performing” or “non-performing”. A note is termed to be performing when regular payments are made on it. On the contrary, a non-performing note means payments have not been paid regularly or on time.
Need more insights or professional guidance on selling your mortgage note at a good rate? Contact Simanda Investments today. They are a reputable real estate and note investments company with years of experience. The team will walk you through every step of the note selling process so you can make the most informed decision. For more information, visit their official website.