Selling a Mortgage Note or Trust Deed

If you have recently sold property and financed the buyer by taking back a mortgage or deed of trust, you own a Mortgage Note. You will be collecting monthly payments for years to come. But what is that worth in dollars today, and how can you get your money ahead of time?  This is called the time value of money.

If you need a lump sum of cash now, you can sell your mortgage note to a third party wanting a regular payment stream as an investment. There are many companies out there that will buy your
mortgage, discounting the payments for the remainder of the loan back to present day dollars.

Keep in mind that the interest rate that will be used to calculate what today's dollars are worth will be different than the interest rate on the mortgage note. Why is this? Well the investor most likely will want a different interest rate than what the mortgage note is for based on current rates.
For example, if the interest rate on your mortgage note is 6%, but the average rate in the market is 8%, why would an investor agree to 6%. He would still be getting the 6% on the face of the note, but by paying less than the present value at 6%, he makes up the additional 2% up front.

One last thing to keep in mind is that the higher the discount rate that a buyer uses, the smaller the
lump sum payment will be. This also works in reverse - if the note says 8% and the current rate is 6%, an investor will pay a premium to buy that payment stream.

We buy mortgage notes and trust deeds.  For more information click here.

Smiling Dog Enterprises

Selling A Business with Seller Financed Mortgage Notes

Business notes or Promissory notes are created when a business owner sells a business using owner-financing. Seller financed business notes, or Seller carry-back notes, are almost identical to Owner financed mortgage notes, except that they are notes created from the sale of a business instead of a home or property.

It is significantly more difficult to get a bank loan for the purchase of a small business than it is to get a loan for the purchase of a home. Businesses historically have a high failure rate, and often do not have enough collateral to satisfy a bank loan.

It is very common for the seller of a business to take back a note (or "carry the loan") to help with the sale of the business. Business sellers usually have no choice but to offer seller-financing. They often accept a down payment for part of the sale, and a promissory business note for the balance. The usual down payment is 33-1/3%, and the seller receives a monthly payment from the buyer for 5 to 7 years. There may or may not be a balloon, interest rate is negotiated.

There are times when the seller is content to receive the payments over many years but it is often the case that they have needs for a lump sum payment instead of collecting the payments over time. The person holding the note however does not want to wait that long to receive all the money from the business, so he or she looks for a someone to buy all or part of the note being held.

10 Top reasons business note holders may want to sell their business note:

1. To Raise cash.
2. To Eliminate debt
3. To have the capital to start their next project
4. Enhance their investment portfolio or planning a new investment strategy
5. Want to buy real estate, home, car, boat or plane?
6. Need to pay for a medical emergency?
7. Need to fund a child 's education?
8. To Fund their favorite cause or charity
9. To Eliminate the hassle and worry of collecting payments
10. Or just want to take the vacation of a lifetime?

To meet your current financial objectives, you can now sell your business notes. In some cases you can sell all the remaining payments of your business note, while in other cases you may sell just enough payments to meet your need. And don't worry about your business 's buyer. When you sell your note, the sale does not affect the buyer at all. Their contract terms remain the same.

There is such a broad range of different types of business notes that can be purchased, it would be impossible to list them all.

Eligible Businesses on which NOTES are sold include, but are not limited to:

Dry cleaners, Hair, Nail salons, Auto repair shops, Printers, Medical & Dental practices, Restaurants/ Bars, Mini-markets, Convenience stores, Manufacturing companies, Various Service industries, Pest Control companies, Mail and Packaging centers, Building maintenance services , And many others . . .

Typical Business Note Buying Criteria:

A. First position as lien holder
B. Substantial down payment (usually 30%-35% minimum)
C. Seasoning (3-5 timely payments made already)
D. Buyer 's previous experience in business
E. Buyer has good Fico credit score (625-650 or above)
F. Note must be fully amortized and in first position
G. Note must be personally guaranteed

While these are typical criteria desired, but each transaction is considered on its own terms and strengths. Every note is reviewed on an individual basis.

I personally believe that most important reason to sell your business note today is that you take advantage of the financial principle of the Time Value of Money, which means that a dollar is more valuable to you today than it will be in the future; you get your money before inflation kills its value.
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Smiling Dog Enterprises

Purchasing Property In Todays Tight Credit Market With Mortgage Notes

People want to have their own house. But in today's extremely tight credit market, a potential home buyer may not be able to obtain financing from a traditional bank or a mortgage company. In this case, a buyer may choose to purchase real property through a land contract or mortgage note.
A land contract sometimes known as a contract for deed, trust deed or mortgage note is a contract between a buyer and a seller of a real property wherein the seller provides financing to
purchase the property for an agreed-upon purchase price and the buyer repays the loan
in installments. The seller holds the title or the deed to the property until the buyer completes all payments stated in the contract.
Purchasing a property by way of a land contract can prove beneficial to the buyer. He/She does not have to contend with hefty down payments, credit requirements or other tedious bank financing prerequisites.
Initial costs incurred with a land contract are also significantly lower than those through bank financing. Likewise, the seller does not have to wait for lengthy bank processes. Furthermore, property sold via a land contract can be priced higher than if sold through bank financing. Since the buyer is not obligated to pay a large down payment, the seller can ask for a higher price or a higher interest rate enabling the latter to realize a considerable profit.
Under a land contract, the buyer and the seller enter into an agreement that stipulates that the seller shall only transfer the legal title of the real property until all agreed-upon payments have been paid in full.
During the duration of the contract, the seller allows the buyer to occupy/use the property for purposes other than legal ownership provided the buyer is not in default. In most land contracts, the purchase price is typically paid with a modest down payment and then
periodic installments for a set period of time. At the end of the course of the payments, the buyer pays off the balance with a balloon or lump sum payment. When the full purchase price inclusive of any interest has been paid, the seller tenders the legal title to the property to the buyer.
If the buyer defaults on his/her regular installment payments or fails to make full payment at the end of the land contract, the seller may re-possess the property. The buyer loses any payments made including the down payment and equity through his/her periodic payments. Money and time spent on improvements on the property will all go to waste. Thereafter, the seller is not required to transfer the deed to the buyer. On the other hand, if the seller owes a mortgage on the property and has not settled the entire loan prior to the buyer's final payment at the end of the contract, the latter may be forced to pay off the mortgage to prevent foreclosure on the property thereby losing his investment. Aside from mortgage on the property,there can also be back taxes or other liens that the seller owes.


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Tips on How To Sell Your Mortgage Note

You might not have been aware of the fact that you can sell your mortgage notes or sell it online, but more and more sellers are choosing to do so.

Many people seeking a lump sum of cash want to know how to sell mortgage notes for top dollar and where to find a note buyer. Fortunately, the process is quite simple. You may get a competitive quote in a matter of hours.

The best part is you can take care of everything via phone, fax and email, so there’s no need to be in the same area, even the same state as the note buyer. And you can usually have your cash in hand within a few weeks, as the average transaction takes between 10-14 days to
complete.

How to Sell Mortgage Notes Online

We are experts at selling notes and you can fill out a form on line or contact us with any questions you may have. We will ask for a little information about you as well as details about
your note. Fill in as much information as you can as this will be helpful to the potential buyer.

Once you’ve submitted your information, you should receive a call or email within 24-48 hours. The initial consultation is always free.

During the initial contact you will discuss the details of your note including balance, time remaining, interest rate, payments to date, etc. The buyer will use all of this information to decide what to offer you for your note.

Keep in mind that it has to make financial sense for them as well, so the stronger the note the more you can expect to receive for it. Remember, the buyer is now assuming the risk for you, so they have to deal with all of the potential problems that could arise down the road,
e.g. inflationary pressures, payor default, unstable economy, etc.

Even so, money today is always worth more than money tomorrow, so even though you will not get the full dollar value when you sell, you still get a guaranteed lump sum of cash without exposing yourself to any risk. And if you are able to invest that money, it can add up to much more than the value of the note over time.

To list your note, click here.

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The Real Estate Market with a New President

The existing real estate market is in decline and current forecasts do not see a significant rise any time soon. However, there are many variables that could affect this forecast. Being an election year, a new president, depending on the policies of his platform, may be able to change the economy to such an extent that the real estate market also changes. There is no guarantee that it will be for the better but it very well may affect change. This late in the game the front runners for the election are Barack Obama and John McCain.

Obama is a Democrat who has a proposed housing reform plan. His reformations include changes to the financial regulatory system to have stricter controls on financial institutions. Also in his plan is a system to help with the current foreclosure problem facing many Americans today. He proposes that the Federal government take steps to assist those who are in financial straits by buying out or refinancing existing mortgages to drop monthly payments.

Also, he wants financial institutions to restructure loans as early as possible when a borrower is having problems. In addition he wants to increase tax incentives for people who have mortgages so they can get a break on their taxes. His final initiative includes a federally funded program costing up to thirty million dollars to help with the existing foreclosure crisis facing America today.

McCain, a Republican holds that there should be little government intervention in the banking situation and that the economic issues should play out naturally. However, recognizing the crisis he is open to suggestion from leading authorities for temporary solutions for assistance in order to help the American public through the crisis. However, he maintains that any assistance should be temporary and any permanent reform should be in the means of regulatory changes and increasing the accountability of banks so that the crisis does not occur again.

He also insists that any financial assistance to the public should be for those in primary residences to save their home and no assistance should go to investors in trouble or those who have trouble keeping up a second home or vacation property. While McCain is amenable to analyzing the issue and open to discussion regarding possible solutions for both long and short term, he is non committal about what his housing policy is and refuses to make it a part of his campaign. He does not want to play on the fears of the public to win votes by touting a reform policy that is not feasible or would not pass.

Both Obama and McCain have recognized the existing housing problems in the country. Both have acknowledged a need for some type of reform. They do, however, disagree on how much government should be involved and in which aspects. Obama has a clear cut strategy for housing reform as part of his campaign platform but that does not mean anything will actually come to fruition if he is elected. McCain has been noncommittal in pinning down specifics but has stated it is something that will take precedence. How the market will unfold after the election, though, will depend not so much on who is elected but what will actually occur when they are. Right now, there is merely discussion and planning with nothing concrete evidenced by either side.

We buy mortgage notes and trust deeds.

Five Steps to Improve Your Credit

For many, improving credit is an important step towards a chance at some of the most important aspects of everyday life. Good credit is vital if you want to own a good car, a good house, or any other major purchase. Like millions of people in America, you might have a few issues with your credit report; here are a few hot tips that can lead to improvement:

Step One: One of the best things you can do in your efforts to improve your credit is to learn your rights. Laws protect you as a consumer, and thus your credit score as well. You need to be familiar with those laws and your rights to improve that score. Policies of all sorts are in place that regulate everything from criteria regarding rejection to the ways a collection agency is allowed to go after late payments. If you're unaware of your rights, you'll find it difficult to insist on the proper steps that are in place to help you. Confusion is the enemy.

Step Two: The three major credit bureaus (TransUnion, Experian and Equifax) are required to provide you with a free copy of your credit report once a year, at your request.

Step Three: Once you have the credit report in-hand, go over it in miniscule detail. File a report for each and every negative item immediately. Any negative item must be investigated by the bureau: if they don't verify it within 30 to 45 days, the item must be removed! There are many reasons creditors refuse to verify information, which is great news for anyone trying to improve their credit. Better still, file your disputes when the credit business is busiest to help ensure there's less chance of verification.

Step Four: For certainty's sake, send every dispute form by certified mail (which only costs a few dollars extra) and request return-receipt. Make sure your records are extremely detailed, covering dates, times, names, every single minor step along the way. You want this process to be rife with delays and it will only help if you can make yourself as difficult as possible for them to deal with. Just one person failing in the verification-chain on their end, that's all it will take to get the negative mark cleared off your record.

Step Five: 30 to 45 days after you've sent in your dispute, get another copy of your report. Pay for it this time if you have to! Review it from top to bottom and start making phone calls about why unverified information hasn't been removed; it had plenty of time, after all. Dispute anything that remains, over and over and over again, until they get tired of dealing with you. Don't give up, because the reward for your persistence is an improved credit score!

In truth, it isn't difficult to improve your credit score, not really. It's as easy as getting your report, disputing everything negative, and repeating those steps until you get the results you want. Pay attention to every little detail and keep strict records, and you'll be well on your way to the better score that you want.

Foreclosure vs Bankruptcy effects on Credit Reports

Nothing is worse for your credit score than a foreclosure or a bankruptcy credit report. Not only will these red flags remain on your credit record for seven years, but your score could drop as much as 300 points overnight, impacting your ability to borrow money for years. Your credit report will show every time you’re 30 days late on a mortgage payment and then the “Notice of Default” will show up. If you are able to stop the house from foreclosing, then you’ll have a good chance at repairing your credit over the next few years. Otherwise, the “Notice of Trust Sale” and the “Trust Deed Sale” will hit your report, scarring your financial freedom for the next seven years or more.

Once you’ve looked at your credit report, you’ll need to focus on improving your credit score. Pay all your outstanding bills on time, first and foremost. On-time bill payments account for roughly 35% of your credit score. Start with the highest interest rate cards and reduce your credit usage to 30% of what’s been extended to you. Replenish your savings, your 401k and other retirement accounts. You may want to contact CCSInc.org to obtain credit counseling and take free financial classes to re-educate yourself on how to save and spend wisely. A foreclosure can really shatter your confidence, as well as your purchasing power, so it’s important that you take this opportunity to reassess how you approach financial decision making as a whole.

So which is worse for your credit score, a foreclosure or a bankruptcy? Even though bankruptcy stays on your credit for 10 years and a foreclosure for 7, “a foreclosure is very serious to mortgage lenders,” said Ray Hooper, Education and Housing Director for the Consumer Credit Counseling Service. “They’re going look at a foreclosure more seriously than they will a bankruptcy that doesn’t include the house.” Hooper says if you’re receiving default notices but still want to keep your house, then you’ll need to catch up on those missed payments.