When Is the Right Time to Sell My Mortgage Note?

There are several schools of thought on knowing the right time to sell your note. When I was forced to sell my mortgage note for the first time, it was because of a shortage of cash. I had some major purchases that I needed to buy and I found another property on the market that was far more distressed than the one that I owned the note on. Therefore, I decided to sell my mortgage note for two reasons - for immediate cash and to make a better investment.

Over the past few years, many people have gotten into the business of owning notes when they really should not have tied up all that money to do so. Perhaps they owned multiple properties and instead of waiting for them to be sold to a qualified buyer, they financed a note on the buyer's behalf. Although in theory this is a great idea to move a home fast, it still leaves you without the cash you need to move forward. If all you are looking for is a regular income, then it is perfect.

However, what has happened recently is that housing prices have dropped and many note holders have realized that they want out of the mortgage business. So, instead of waiting and hoping each month for the buyer to pay off the note, they have decided instead to sell the note. This is a good idea, and although you certainly won't realize the full value of your note, you will be getting a good chunk of change at the end of the day, and get out of a deal that maybe wasn't as good as you thought.

So, if you are asking, "Should I sell my mortgage note?" your answer should be based on your cash flow needs, your cash in hand needs, and how your gut feeling about the current deal is. If you think you will be waiting thirty years for a payoff, you may decide that simply selling your note now and taking the loss is a much better financial deal for you.