Real Estate Note Essay
What is a Real Estate Note?
A real estate note or mortgage note is similar to a promissory note which is a written promise or obligation to pay a specific amount, with interest, within a specific time frame. The mortgage, also known as the security instrument, pledges the property as collateral to ensure the performance on the obligation. This allows the note holder to sell the property and re-coop his investment in the event the payer does not pay as agreed.
Mortgages can be sold over and over many times. In fact, it is very common. Those of you that have ever owned a home, you may have experienced this when you are notified that your loan is being serviced by another lending institution. Your mortgage note was just sold, at a discount, …show more content…
They will receive a very nice return for a long period of time. They also play the odds that most homeowners will sell or refinance within 5 years so they get an early payoff. Not only this, but the homeowner can usually stay in their home which creates a win, win, win for everyone.
Buying Notes vs. Short Sale
There are huge advantages of buying the note vs. doing a short sale even though they are very similar in process. One of the biggest advantages is that the homeowner can stay in their home. Those that have 2nd mortgages are perfect candidates. After the mortgages are discounted, it makes the payments manageable not to mention create equity in a home that previously was upside down or under water. Now the homeowner has the option of selling and making a profit.
Short sales take a very long time. This is an equity sale so the process is very quick and it does not harm the homeowners credit like a short sale would. In fact, the homeowner doesn't even need to be delinquent. We've settled 2nd mortgages that were not delinquent. We also negotiate release of lien and liability to protect the homeowner from deficiency issues that a short sale may not
A real estate note or mortgage note is similar to a promissory note which is a written promise or obligation to pay a specific amount, with interest, within a specific time frame. The mortgage, also known as the security instrument, pledges the property as collateral to ensure the performance on the obligation. This allows the note holder to sell the property and re-coop his investment in the event the payer does not pay as agreed.
Mortgages can be sold over and over many times. In fact, it is very common. Those of you that have ever owned a home, you may have experienced this when you are notified that your loan is being serviced by another lending institution. Your mortgage note was just sold, at a discount, …show more content…
They will receive a very nice return for a long period of time. They also play the odds that most homeowners will sell or refinance within 5 years so they get an early payoff. Not only this, but the homeowner can usually stay in their home which creates a win, win, win for everyone.
Buying Notes vs. Short Sale
There are huge advantages of buying the note vs. doing a short sale even though they are very similar in process. One of the biggest advantages is that the homeowner can stay in their home. Those that have 2nd mortgages are perfect candidates. After the mortgages are discounted, it makes the payments manageable not to mention create equity in a home that previously was upside down or under water. Now the homeowner has the option of selling and making a profit.
Short sales take a very long time. This is an equity sale so the process is very quick and it does not harm the homeowners credit like a short sale would. In fact, the homeowner doesn't even need to be delinquent. We've settled 2nd mortgages that were not delinquent. We also negotiate release of lien and liability to protect the homeowner from deficiency issues that a short sale may not