08 Aug Mortgage Note Market Value: How to Know Your Price?
What Influence the Market Value of Your Mortgage Note?
If you are looking to sell the note you have in your hand, there are several factors that could affect its market value and the price a mortgage lender can offer. Before you start selling your note, you have to research first what factors to consider. You have to know the value of your note before you start making a deal with a lender.
It’s better you are armed with the right information about your note so you can get the best cash option from it. To get you started, here are the common and mostly looked after factors by private lenders when buying your note.
a. Credit Score. This is perhaps the main influencer that affects the market value of your mortgage note. The score will have five factors to be considered. These will be the payment history, the length of the credit, utilization of credit, a new credit account and credit account mix. Every mortgage note buyer wants to know the borrower’s ability to pay back the loan. If the borrower pays on time, do not have lots of new accounts and demonstrate that he or she can handle the loan, your note might be in a good price.
b. The downpayment of the borrower. The amount the borrower puts down for the mortgage loan can actually affect the value of the note you are selling. If the note contains about 20% down, it is likely that your mortgage note is valuable.
c. The amount of the loan. If the note contains a small amount of loan, it will like to be sold immediately. If it involves a bigger loan, a mortgage lender might consider it but will require lots of information needed on your side. This is because bigger loans mean the bigger risk is involved. Therefore, a long negotiation may involve regarding the price.
d. The term of the note. The term of the note such as the time span of the payment affects its value. The shorter the term the better. Most mortgage lenders prefer a shorter loan term.
e. The payment history of the creditor. It also affects how much can you sell your note by knowing how much payments were already made. A private mortgage lender might also look into it if it’s a performing or a non-performing loan note. Having a strong payment history makes your note more valuable.
There are more factors to be considered. You have to look for the best mortgage note buyer to get informed. But before that, you also need to do a little research for yourself.
Is My Note Saleable?
Almost all notes can be sold but some might have greater value than others. This will depend on the factors involved above. Just make sure the note has a good credit rating and a payment history. These factors will make your note valuable.
At Note Seekers, we will help you going through the process. This is from determining the value of your note and closing the sale deal if ever you decide to choose to sell it with us.