Frequently Asked Questions From Those Who Want To Sell Mortgage Notes

by Shiloh Fletcher Free Lance Writer If you are in need of money quickly or can no longer afford your house payment, you might want to sell mortgage note, rather than putting your home up for sale. Here are some of the most frequently asked questions from those who want to sell mortgage notes.    

What is the Difference Between Selling a Mortgage Note and Selling a Home?   

When you sell mortgage notes, you are basically allowing somebody to take over your current mortgage, in exchange for your home, or possibly even a small bit of extra money if the amount you owe is way lower than current market value. When you sell a home, the buyer has to get their own mortgage and go through closing. It can be a long process. If someone can no longer afford their mortgage payment or needs money fast and can't wait for the home to close, selling the mortgage note may help them get someone to cover their bill or get money for their home quickly.  

 What is the Downside to Selling a Mortgage Note?    

The downside to this is that most mortgage note buyers do not pay anywhere close to full market value for the home. Most are realtors or investors who are looking to buy your note and then flip the home to an interested buyer. In order to make money on the deal, they have to buy low. If they are buying the note at full market value, there is no profit in it for them. Therefore, if you have the time to put your home on the market, you can likely sell it for much more than if you used a mortgage note buyer.   

 If I Sell Mortgage Note and the Buyer Defaults, Am I Responsible?    

This is a complicated legal matter that you should address with a real estate attorney before you sign a contract. However, the general answer is no. When you sell the mortgage note, a deed of trust is issued and filed with the county the home is in. Therefore, you shouldn't be held responsible. However, some mortgage note buyers are carrying your mortgage for you, simply making the payments on your behalf. This prevents them from having to take out their own loan for the home. Most do this, as they intend to flip the home quickly. If you agree to this, and they default on the loan, your credit may be affected and the bank may come after you. Most lawyers advise that the contract state that the home must be refinanced into someone else's name within six months, and in the meantime, enough money is put into trust to cover six months worth of mortgages payments. This is the best way to protect yourself in such a situation.    

What are the Benefits to Selling a Mortgage Note?    

As discussed above, some of the benefit include being able to get unload your home quickly if you can't make the payments, if you need to sell it by a certain date as ordered by a divorce or estate judge or if you need money fast and owe less than your home is worth. Another benefit is that the real estate market is really sluggish right now. You have to be pretty creative to get your home sold. For those who have to get rid of a home because they are moving for a new job or their home is too small for their current family, this may be a creative option that gets them out of the home. Basically, anytime you owe less than what your home is worth and you want to get rid of your home quickly for any reason, selling the note is the best way to do so.

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Created on Dec 31st 1969 18:00. Viewed 0 times.

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