With Interest Rates near historical low there will probably never be a better time to sell a mortgage note or promissory note. You see, the market value of your mortgage note is inversely related to the general interest rate environment. This means that as interest rates fall, the market value of your mortgage note increases; and as interest rates rise, the market value of your mortgage note decreases. If you believe that future interest rates are more likely to go up than down, now would be an excellent time to turn your mortgage note into cash.

Here are 5 Things that every Note Holder should know before Selling their Real Estate Note.

1. What is My Real Estate Note Worth?

This is by far the most common question note holders want answered. Although there is no guarantee, real estate notes are typically sold for 60-80 cents on the dollar. The actual value of your note depends entirely on the note’s quality (property location, loan to value, payor history, etc.).

2.Why is my Note Discounted?

Simply put, one dollar today is worth more than one dollar tomorrow. By selling your note, you receive a lump sum of cash in exchange for the remaining monthly payments due on the note. The investor purchasing the note is assuming unforeseeable risk such as declining real estate values or payor default. To account for this risk, the note is discounted to increase the investor’s yield.

3. What can I expect when Selling my Note?

The process of obtaining a quote on the value of your real estate note only takes 24 hours. If you decide to move forward with the sell, more information and original documents will be collected over the closing process. The entire process to sell your note takes approximately three to four weeks.

4. Are there tax implications when selling my Note?

The method used to sell a note, and the capital gain or loss from the sell, could affect your taxes. We strongly encourage potential note sellers to talk to their accountant about the tax implications of selling a note.Click here to read about a CPAs’ Blog on Tax Implications

5. How will my notes value be affected in the coming years?

The real estate market is constantly changing. Outside forces such as the economy, real estate values, and government regulation could cause the value of your note to fluctuate. We encourage note holders to stay informed on the industry and be prepared with a Plan B, should the market not move in their favor.

If you are considering selling your note, it never hurts to get a quote to find out what it’s worth. Start the process by clicking the image below. We can provide you with a quote on the fair market value of your real estate note within 24 hours

Click Here to Receive Your Free Note Analysis!