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The holder of the note has the option to continue to receive monthly payments or
to sell all or part of the note to an investor at a discount.
How Much is My Note Worth?
The amount a note is worth depends on several factors including appraisal and
title of the property, as well as the credit score of the property buyer. Other factors that effect the note value is how
large a down payment was paid and the interest rate of the loan specified in the note.
Another way of asking this question is "How much of a discount must I take if I sell my note?" All notes are purchased at less than the remaining balance of the note when the note
is purchased. The difference between the remaining balance and the purchase price of the note is the "discount."
There is no standard discount because there are no standard
notes or standard properties. Each note is different and each note must be individually researched in order to determine its
highest value. EDH Funding can assist you with this process. If
you have a need for cash, but do not want to sell the whole amount of your note immediately, you can sell only a part of the
payments on our note now and still receive much of the remaining principle later. This is illustrated in the example on this
page. The note's value may be higher or lower depending
upon property type, terms and payor information. Every note, property and payor is unique and is evaluated to provide the
highest possible price and best possible options based on the specific situation. The best way to find out how much your note is worth is to get an appraisal from a professional note buyer.
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Note about Note Safety...
Be wary of some people who may approach you offering to buy your note for cash. Many of
these buyers will attempt to give you a low-ball offer, whereas a professional note buyer will be more competitive with current
secondary mortgage money market rates. Also, many amateur note buyers don't know how to structure partial offers tailored
to your needs and many don't know how to close the transaction properly so both the note holder and the note buyer are
protected. Learn more about Note Safety...
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SALE EXAMPLE - $90,000
NOTE |
Terms
Sale Price = $95,000
Down
Payment = $ 5,000
Loan to Value = $84,257/$95,000 = 89%
$90,000 Face Value of the Note
10% Interest Rate
15 Year Term (180 Payments)
$967.14 Monthly Payments
24
payments have been made.
The current balance owed is $84.257.19.
Some Selling Options
1.
Do Nothing.
Continue receiving the remaining 156 monthly payments of $967.14.
2. Full Sale.
Sell the entire note now.
3. Partial Sale - Front End Payments.
Sell the next
5 years of payments (60 payments). Then receive the last 96 payments. Note Holder Receives: $40,653.34 CASH NOW for the partial sale plus $63,736.86 loan balance in 5 years. This
equals $104,390.20 total cash to the note holder.
4. Full Sale - Split Funding.
Sell one half (the next 78 payments) of the note now and the other
half (the remaining 78 payments) of the note after the first 78 payments are paid. Note Holder Receives: $48,010.47 CASH NOW plus $48.010.47 Cash in 78 months This equals $96,020.94 Total Cash
to Note Holder.
5. Partial Sale - One
Half of Each Monthly Payment.
Sell one half of each monthly payment and continue to receive the other half. Note Holder Receives: $33,114.72 CASH NOW plus $483.57 per month for 156 months.
This equals $108,551.64 Total Cash to Note Holder. Many other options are available. EDH Funding can
tailor a transaction according to the cash needs of the Note Holder.
LEARN MORE ABOUT NOTE SELLING OPTIONS
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