Let's face it, no one buys a real estate mortgage or creates an owner financed note in hopes that the payments stop coming in. Although not the norm, payers do default on notes, stop paying, get behind on payments, or outright walk away from the property. It goes without saying that you should always comply with all debt collection laws when dealing with a borrower/payer that gets behind on … [Read more...]
What is Note Seasoning?
Here is something you might not have thought of...There's not just one single item that determines the value of your real estate note. It's actually a combination of multiple variables including payment terms, interest rate, equity, property type, the buyer's credit, and note seasoning. That last one, note seasoning, might sound a little cryptic, but really breaks down to being one of the biggest … [Read more...]
What are LTV and ITV?
Knowing the value of things is important---and real estate and mortgage notes are no different. Whether you are exploring offering seller financing or looking into selling a note, understanding the value what you are providing or own is paramount. Not only for your financial safety but for reselling down the road as well. What is LTV? Loan to Value, or LTV, is an indicator of potential … [Read more...]
What are ‘Face Rates’ and ‘Discounts’ On Notes?
If you're interested in seller financing or ready to sell your note, the terms 'face rates' and 'discounts' are probably words you have heard thrown around. If they aren't, here's an important quick overview. What is the Face Rate of a Note? Also known as the 'present value,' the face rate is simply the interest rate on the note and mortgage. The ideal face rate for a note depends on which party … [Read more...]
5 Reasons Owners Offer Seller Financing
Why would a seller allow a buyer to make payments over time for the purchase of property? Wouldn't the seller rather get paid now and require the buyer to obtain a bank loan? Here are 5 reasons property owners offer seller financing: 1. Reduced Marketing Times What is the first thing a real estate agent does when property is not moving and has been on the market for 60 to 90 days? They reduce the … [Read more...]
