Avoid Risk and Inflation, Approach a Mortgage Note Buyer

2007-05-02 10:04:19

( Financial )



There is a fast cash scheme for your private or seller financed mortgage note buyer if you need cash now. There are brokers and investors who will buy mortgage notes, trust deeds, mortgage balloon payments, subsequent mortgages and other contracts secured by real estate properties. These note buyers may offer you with a range of options from full purchase of your note to different kinds of partial purchase options.

By selling your note to a mortgage note buyer, you convert long term income and get the cash to day that you would want when you sell your property. This is a secondary market that evolved from institutional investors who provided the purchase financing money when these institutions are inclined to resell the loans after they are originated in order to avoid the financial risk of holding the loan for the entire long term.

Renewed funding opportunities are provided by this scheme which can be used for further lending transactions.

Because the individuals holding the note would prefer to receive cash, the note buyers help accomplish this goal. The initial note holder would like to avoid risk and inflation which makes money in the future less than money today.

This business involves the time value of money which is the difference in the present value or cost of money and future value when the money flows in or is paid out in a specific time in the future. The value of the current investment increases in worth because of the process of compounding of interests.

The total concept of the business involves the seller financing contract which is contained in the promissory note or generally, the mortgage note held by the seller. This note is secured or collateralized by the mortgage deed which allows the seller to foreclose the property when there is default in the payments. By buying the note, the mortgage note buyer becomes entitled to the monthly payments as new holder for the lump sum paid to the seller.


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