Why Mortgage Notes Are So Important
Why Mortgage Notes are so Important
Real estate and business notes (often referred to as promissory notes) have been around since the first piece of real estate has ever been sold. Before banks created the first mortgage and began lending to borrowers, individuals would create private mortgage notes between each other. But today all mortgages notes and real estate and business notes are done mainly by banks and financial lending institutions. People created these private mortgage notes between each other for hundreds of years before the banks started to create these real estate and business notes themselves. The are many different types of private mortgages that can be create between individuals such as: mobile home notes, business notes, commercial notes, land notes, and residential notes.
This practice of individuals creating notes between each other still goes on today but just in a much smaller percentage and has yet to reach the mainstream real estate industry and is often referred to as a 'hidden gem' in the business due to the fact that most people who create private notes to sell a piece of property have no idea they can sell their note for full market value instead of waiting for the real estate or business note to mature. Today, notes are oftentimes referred to by many different names such as: mortgage notes, contract for deed, land trust, private mortgage, deed of trust and promissory note. Also the majority of notes being created in this unstable and unpredictable are done through creative financing because the buyer usually doesn't have enough money for the down payment or for whatever reason to purchase the real estate or business, so the seller of the property acts as the 'bank' and loans the money to the buyer under the agreed upon terms. This type of real estate transaction is not openly discussed by real estate agents and other real estate professionals and has yet to reach mainstream media and other news outlets very often. This as become a very viable and attractive option to many sellers due to the very strict lending guidelines of almost all banks in this very unpredictable market. Most individuals who are holding these private notes due not know about this very attractive option for them to receive cash for the market value of their note. They believe they have to hold the note for the entire loan term and continue to receive payments each month instead of cashing out today for the full market value of their note and furthermore this can be very helpful to many note holders who may need a large amount of cash for whatever reason necessary.
Another highly non talked about part of the note industry is the knowledge that the note holder can sell their note at any time at any time during the loan term instead of waiting years for the note to mature. Many sellers did not even want to create the note in the first place and instead would much rather receive cash for their residential, commercial or business note today instead of waiting for loan maturity which could take years. Oftentimes a financial crisis has come about where the note holder must absolutely need cash instead getting the monthly payments and our company teaches note holders the options they have available when holding their note or maybe how they can get out of holding the note that they may not have wanted to take on in the first place. Many times our free information and services have saved many businesses and kept the financial lives of many individuals who if had not known about our services may have suffered further unnecessary problems.
by: Mike Surdyka
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