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The #1 Error That Mortgage Note Holders Create When They Go To Sell A Real Estate Note
By Vic Hurlstorm | June 11, 2009
The most repeated mistake that a mortgage note holder makes in my judgment begins when the note holder starts to put the note together. What they do, or should I say what they don’t do is check the potential buyers credit score ahead of signing in the signature box on the mortgage note. I could not believe it when I saw this being practiced, now that I have been at this business for years I am still seeing this business of not checking the promising buyers credit score much to often.
What the mortgage note holder does not realize is that checking the buyers credit score would save him/her money both in the present and also down the line.
How might that be you ask? Well let me begin by saying that checking the possible buyers credit score will put your mind at ease, just knowing that the promising buyers credit is good and you are comfortable that the buyer will be able to pay the debt back to you. I don’t know where this idea of not checking the probable buyers credit report comes from, but I myself have not at any time applied for credit without having someone pull up my credit report.
The other way that checking the buyers credit report benefits you is if later you feel like you would like to sell a Mortgage note, promissory note, contract for deeds, or just about any type of cash flow note and turn it into a cash lump sum. By checking your buyers credit score when you first put together the note, you actually made your note worth more years down the line.
The object of this is that if you are going to sell a mortgage note, one of the pieces of information the note buyer is going to expect is the payor’s (i.e. this would be the individual that is making payments to you) credit score info. The thing about it is that to the note buyer, the stronger the buyers credit score, the more desirable the offer will be when you go to sell a real estate note anywhere.
The payors credit score is going to be one of the major aspects that the real estate note buyer looks at when estimating how much to offer you when you sell your mortgage note. The reason this is such a large part is that the note buyers perspective is the stronger the credit score the less risk there is in buying this note. Now we can see for sure that you can make money in the future by doing a uncomplicated thing like checking your promising buyers credit score before you signing at the bottom of a note.
Ok, You want the answer to the question! What is it that I believe to be a adequate credit score when it comes to mobile home notes, promissory notes, real estate notes, and just about any type of cash flow note you can think of? Myself I would not accept a payor’s credit score that is less than 565, but this is something that needs to be worked out by both the note holder and the note buyer.
The higher it goes from there the more the buyer will offer you when you sell a real estate note. Very important: The payor’s credit score is going to make up approx 35 to 40 percent of how the note buyer estimates the value of your note. So if you are putting a new real estate note together constantly remember to check your buyers credit report for a credit score, as this will benefit you both now and down the road.
If you are looking to sell a real estate note , or are just looking for more information on selling real estate notes, selling mobile home notes, selling mortgage notes, selling trust of deeds, or selling cash flow notes. Please come by our website as we have all the information you are looking for, and our staff is very helpful.
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