Mortgage VS. Mortgage Note | What Is The Difference?

September 24, 2021

Mortgage Vs. Mortgage Note | What is The Difference?

A mortgage is a type of loan you can use to buy or refinance a home. Mortgages are also referred to as “mortgage loans.” Mortgages are a way to buy a home without having all the cash upfront. The mortgage note, on the other hand, is exactly what it sounds like — the borrower’s written, signed promise to repay the loan.

The Mortgage

A mortgage, or mortgage loan, is a loan that allows a borrower to finance a home. You may also hear about a mortgage called a home loan. These terms all mean the same thing. A mortgage is a loan secured by property that is used as collateral, which the lender can seize if the borrower defaults on the loan.

The Mortgage Note

Mortgage notes, also known as promissory notes, are written agreements in which one party promises to pay another party a certain amount of money at a later date in time. Banks and borrowers typically agree to these notes during the mortgage process. When a borrower takes out a loan, promissory notes legally bind them to repay it.

Its Difference

The main difference between a mortgage note and a mortgage is that a mortgage note is the written agreement containing the details of the mortgage loan, whereas a mortgage is a loan that is secured by real property. A mortgage note is often referred to as a promissory note and is the document generated and signed at closing.

Homebuyers usually think of the mortgage or deed of trust as the contract they’re signing with the lender to borrow money to buy a house. But the promissory note, also known as the mortgage note, is the document that contains the promise to repay the amount borrowed. The purpose of the mortgage or deed of trust is to provide security for the loan that’s evidenced by a promissory note.

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Mortgage Note

What You Need To Know About Mortgage Notes

September 10, 2021

What You Need to Know About Mortgage Note

A mortgage note is a legal document that details the loan terms and other significant information of a property purchase. The note constitutes who the buyer and lender is with underlying terms such as when payments are due and the agreed plan for repaying the borrowed money to purchase a property.

Lender Security

Deals between a lender and borrower always require a legal binding document as a protection for the lender before funding a property purchase. Mortgage notes serve as a security for the lender, thus, keeping the borrower legally bound to pay the loan. Once both parties have signed the note, the lender reserves the right to take legal action in case the borrower fails to make a payment on time, or defaults on the mortgage.

The mortgage note specifies the payment plan, the amount borrowed, interest rate, and lender action if the payment stops. Until the loan is paid in full, the note provides the lender control of the property.

Classification of Mortgage Note from Common Loan Types

Different types of loans clearly do not have the same stipulated terms as the mortgage note also differ. There are a few types of loans that are commonly used by mortgage lenders according to the borrower’s needs. The loan types below are the most common which affect the terms of the mortgage note accordingly.

Private Loan

When the lender is also the owner of the property, he can create the terms and stipulations of the mortgage note. This type of home loan has minimal regulation often subject to terms as per the desire of the lender.

Secured Loan

Secured loans make use of physical assets such as a property or a vehicle to serve as a form of collateral. An optimal deal benefits both the lender and the borrower. These types of loans can have lower interest rates due to lesser financial risk taken by the lender. Unsecured loans on the other hand do not require a collateral for approval but are solely based on the borrower’s financial history.

Institutional Loan

Traditional mortgages done in banks or financial institutions have more regulations compared to other types of loans. It requires strict adherence to standard payment terms and interest rates that must be documented in the respective mortgage note.

Let Me Help You Out

If you happen to have a mortgage note and you are curious what your note is worth; Or you are just looking to sell your mortgage note and you are unsure how to start selling; Or maybe you’re finally tired of being nervous about your borrower’s ability to pay; Or who knows, maybe they’re not paying and you just want out!

If any of those scenarios are true, consider yourself lucky because you’ve definitely come to the right website.

Mikk Sachar is a Private Note Investor and is ready to make you a cash offer no matter if your borrower is current or behind. He will make you a cash offer for your mortgage note fast. All we need is some simple information and about 48-72 hours to do some research and we’ll be ready to make you an offer.

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Discover How to Sell a Mortgage Note & Create Maximum Value

How to Maximize Your Mortgage Note’s Value With Iron Clad Record Keeping

December 4, 2018

Ok… this is ONE of the VIP tips that most note seller’s value the most. How to maximize your mortgage note’s value by simply keeping good payment records. Can’t get much easier than that can it?

Simply put, keeping a detailed, well-organized and legible payment record showing the date each payment was received, and a breakdown of the principal, interest and late charge for each amount received is important to maintaining the value of your mortgage note.

If you ever decide to sell your real estate note or contract for deed, you will be required to show the mortgage payment history to a prospective note buyer so the note buyer can verify the payment patterns of the note payor.

If the payments on a “seasoned” note, which is a note with a payment history over an extended period, have been made consistently on time, the value of the note will be greater than if the payments have been late or delinquent because the perceived risk of the note is lower.

Use the payment record sheet in the back of “The Note Holder’s Guide” to keep a record of your note payment history. If you don’t have it, click here to get the Mortgage Note Holder’s Guide. Also, make sure to print out an amortization table for your loan amount. Go to www.bankrate.com to obtain a printable amortization schedule.

Another good way to keep good record keeping of your mortgage note payment history is to use a mortgage servicer for your mortgage note. That way you’ll have a professional record of your mortgage note’s payment history. This is even better than keeping your own records so definitely consider that if you want to maximize your mortgage note’s value.

As you know by now, I’m a professional mortgage note buyer. If you’d like to sell a mortgage note, simply get in touch through the contact me page.

Thanks for checking out this latest post from sell my mortgage note for cash

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Discover How to Sell a Mortgage Note & Create Maximum Value Mortgage Note Safety

How To Keep Your Mortgage Note Storage To Maximize Its Value

December 1, 2018

Hey again and thank your for visiting SellMyMortgageNoteForCash.com. I’m glad you’re here to learn on Mortgage Note Storage and hoping you are enjoying this tutorial series of blog posts regarding selling your mortgage note.

How To Keep Your Mortgage Note Storage To Maximize Its Value

Today we are going to talk about an overlooked aspect of creating and managing mortgage notes; mortgage note storage!

Sounds pretty boring I know. In fact, it’s a subject overlooked very often in the real estate mortgage business but it shouldn’t be because it’s pretty damn important.

Truth is, if you create a mortgage note but have horrible administration skills in regards to keeping the documents safe, you may as well not even create a mortgage note. How come you ask?

Because the mortgage note and the documents you create in conjunction with it are the documents that keep your interest and ownership safe. Without proper documentation you no longer have an asset of value but rather useless pieces of paper you can’t do anything with.

Now that you realize the documents created are where the true value lies, how should you protect them?

My advice is to keep your original note in a safe place such as a safe deposit box or a fireproof safe in your home. Make a photocopy to keep with your trust deed and other escrow papers but keep the originals in a safe deposit box.

There are two reasons for this precaution.

First, the note is not recorded in the county recorder’s office. The deed of trust is. If you lost your deed of trust, you could simply get another copy at the recorder’s office.

Second, your note is a negotiable instrument which means it can be endorsed on the back just like a check. And also just like the title of your car. You wouldn’t keep an un-cashed check or the title of your car lying around for someone else to easily steal would you?

As such, make sure you properly store and house your mortgage note paperwork as well because just like an un-cashed check and the title of your car, the documents are a very important asset.

I hope you enjoyed this post and now have a better understanding of how important it is to keep your mortgage note documents safe. Thank you for visiting Sell My Mortgage Note For Cash.

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Discover How to Sell a Mortgage Note & Create Maximum Value How Much Is A Mortgage Note

Mortgage Note Safety – What exactly is Loan to Value and why it’s important.

November 19, 2018

Mortgage Loan To Value | Its Importance And Why

Welcome to yet another tip from sell my mortgage note for cash. What exactly is the Mortgage Loan to Value and why is it important?

Today we are going to discuss one of those acronyms in the Mortgage Note world that sometimes people get confused about. Truth be told, it’s quite simple to understand really and if you’re going to get involved in mortgage notes in any way, it’s very important you understand this concept.

So today we are going to be talking about Mortgage Note Safety and the mortgage note’s loan to value ratio… aka LTV.

Simply put… a low loan-to-value ratio makes your note safer and increases its resale value.

But what exactly is the loan-to-value ratio…aka LTV?

The loan-to-value ratio for your note is the sum of the current loan balance(s) for your loan and all senior loans divided by the current market value of the property securing the note.

Here are 2 scenarios.

(Scenario 1)
Loan Amount – 1st Lien Position = $100,000
Loan Amount – 2nd Lien Position = $0 (n/a)
Market Value of Property = $200,000

Loan to Value Ratio = 50% (100,000 / 200,000)

(Scenario 2)
Loan Amount – 1st Lien Position = $100,000
Loan Amount – 2nd Lien Position = $44,000
Market Value of Property = $200,000

Loan to Value Ratio = 72% (144,000 / 200,000)

In general… the lower your LTV, the more valuable your note.

Why?

Simple… the lower the LTV the more equity there is in the property. Equity is simply defined as the difference between the market value of the home and the loans against it.

For example, let’s assume the home is worth $100,000 and there are 2 mortgages against the house equaling $65,000. In this case, the equity is simply $35,000 which is the difference between $100,000 and $65,000.

With $35,000 in equity, investing in this mortgage note is way safer than investing in one that only has $5,000 in equity.

Assume the home is worth $100,000 but this time the mortgages against the property equal $95,000. In that scenario, there is only $5,000 of equity which means… if someone buys this note, there is only a $5,000 cushion in the home’s value before the amount owed against the home is more than the home’s value itself.

That’s a scary situation for mortgage note investors because home values can easily fluctuate $5,000 but it’s harder for them to drop $35,000 in value. As such, the note against the home with $35,000 in equity is a way safer mortgage note investment than the one with only $5,000 in equity.

In LTV terms, the safer investment discussed above has an LTV of 65% as opposed to the more risky mortgage note LTV of 95%.

In summary, the LTV of your note and deed of trust on the property (first position, second position, etc.) is critical to the note’s value. The lower the LTV the more attractive of a mortgage note you have.

Thank you for reading and I hope this explains Loan to Value a little better. Be on the look out for my next tip here at Sell My Mortgage Note for Cash.

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Discover How to Sell a Mortgage Note & Create Maximum Value Mortgage Note Safety

The Security Instrument | What Is It And How Does It Help Me?

November 15, 2018

Tutorial Part 2 – The Security Instrument… What Is It and How Does It Help Me?

Hi and Welcome. In today’s lesson we’re going to discuss the nuts and bolts of the Security Instrument.

Let’s get started. Simply put…

The security instrument is the document that provides for the alternate repayment of the debt to you in the case of default by the borrower. Pretty boring I know but of course very important when it comes to real estate notes, especially if you’re considering selling your mortgage note.

The security instrument is recorded in the county recorder’s office as a lien against the title of the property you sold.

There are three kinds of instruments used to make real estate security for a debt:

(1) mortgage, with or without the power of sale;

(2) deed of trust; and

(3) land contract.

In many states, deeds of trust are by far the most common. People often call them mortgages. They account for well over 99% of the security devices used for real estate.

The land contract—known by many names such as installment contract, contract for deed, contract of sale, conditional sales contract, and the like—is also used on occasion.

I hope you enjoyed this quick tutorial.

Here’s a quick definition of the Security Instrument by Quicken Loans.

Thank you once again for visiting Sell My Mortgage Note For Cash.

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What Exactly Is A Promissory Note?

November 10, 2018

What Exactly Is A Promissory Note?

Hi and thank you for visiting. I’m glad you’re here because today I’m going to start my tutorial series on mortgage notes and teach you everything you would ever need to know about real estate notes, starting with the answers to the question: What is a Promissory Note? .

If you’re here, you probably already know that I’m a professional mortgage note buyer but this tutorial series isn’t about me. Instead, it’s about you learning the ins and outs of mortgage notes in the hopes that when the time comes and you’re ready to create one, you create one of great value.

Because trust me, there are good and crappy mortgage notes out there. The last thing you want to do is create a bad note that has no value in the market.

To help you avoid that, my plan over the next several weeks is to update this blog with a new tutorial at least every 2 weeks coupled with a video as well for a better understanding of the material.

Thank you again for visiting Sell My Mortgage Note for Cash. Let’s get started. Here’s your first video with additional text below.

Tutorial Part 1

In today’s lesson we’re going to discuss some of the nuts and bolts of the mortgage note business. Just so you understand where you are right now, you are here because you are interested in selling a mortgage note. Perhaps you’re not even aware that you can sell a mortgage note.

If that’s true, consider yourself lucky because you are definitely in the right place if you are interested in selling a mortgage note.

Before we get too deep into the lessons, I think we need to first cover the basics. And that’s what I’m doing today with this sell my mortgage note for cash tutorial part 1 titled “Promissory Note, What Exactly is It?”

Let’s start here!

Did you know that The Promissory Note does five different things.

Defined properly, a promissory note is a written promise to pay a certain amount of money, and its payment is secured by some type of security instrument that becomes a lien on the real property.

In particular, the note specifies:

(1) the amount of the loan (principal);

(2) the interest rate (interest);

(3) the amount and frequency of payments (debt service);

(4) when the borrower must repay the principal (due date); and

(5) the penalties imposed if the borrower fails to timely pay or tender a payment (late charge) or decides to pay a portion or all of the principal prior to the due date (prepayment penalty).

Further, the promissory note identifies the person who makes the payments to you (the buyer of your property—the borrower) and the person who receives the payments (you). In a nutshell, that’s exactly what a promissory note is. Pretty simple really.

That’s it for now. Please look for my next sell my mortgage note for cash tutorial where I’ll reveal yet another important aspect of the mortgage note.

Here is investopedia’s definition of a Promissory Note. Pretty damn boring if I say so myself. Lol.

Thank you for visiting sell my mortgage note for cash.

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Common phrases by theidioms.com