American Equity Funding is often asked by private mortgage owners how to structure a marketable owner financed mortgage note in order to acquire a profit. The following seven suggestions will increase the worth of your note :
1. Choose the right mortgage buyer
Always require potential mortgage note buyers to fill out an application and pull their credit. Pending permission, American Equity Funding can pull the credit free of charge.
2. Secure the best interest rate
Conduct due diligence by researching current market trends in your area and securing the best interest rate when it is time to sell your real estate note.
3. Implement a short term
Keeping the term as short as possible while still manageable for those making the payments will promote a better price when selling your note
4. Obtain a sufficient down payment
A larger down payment increases the Loan-to-Value (LTV) ratio and strengthens the selling value of your mortgage note. The Loan-to-Value is the ratio of your mortgage and your property’s appraised value.
5. Employ a professional
Employing a qualified professional to prepare your documents will guarantee your note is in compliance with all state and federal laws. Attorneys specializing in real estate will be able to assist in these matters.
6. Purchase a mortgagee title insurance policy
A mortgagee title insurance policy protects the lender from future claims to ownership of the mortgaged property. The cost is usually minimal (approximately $100.00), especially if a combination policy is available which covers the owner as well as the person holding the mortgage. This policy quickens the process when selling your note and is much more expensive when added later.
7. Charge a reasonable late fee
A reasonable late fee which is in compliance with state and federal regulations encourages the purchasers to pay on time and avoids stress.
Following these beneficial suggestions when structuring your owner financed mortgage note will facilitate a successful and profitable note selling result! Please contact American Equity Funding for more information.