As the housing market recovers from the chaos of 2008 and 2009 you’ve probably read more about seller-held mortgage notes and deeds of trust. What are they? How do they work? DM Direct Funding is a Florida mortgage note buyer with over a decade of experience valuing and administering seller-held mortgage notes. According to DMO’s Doris O’Halloran, seller funded mortgage notes and trust deeds are important alternatives to the mainstream mortgage market. She notes that “A properly administered seller-held note serves different clientele for more flexible terms without adding risk to the borrower or lender.”
Seller funding can also serve the needs of non-traditional borrowers. “There are many people who don’t match the one size fits all bank profile of a qualified borrower, but who still represent safe prospects for mortgage loans,” says Ms. O’Halloran. For example, self-employed individuals often find it hard to find suitable mortgages or trust deeds, no matter how successful their businesses are. Institutional guidelines may also ignore job stability, expected cash windfalls such as investments, and many other factors that contribute to financial stability in an unconventional fashion. Even unconventional borrowers should be well-qualified for the loan, however. Again, expert advice is recommended.
Thus, while a seller-funded note occupies an important niche separate from mortgages administered by banks, they require care and attention. The seller should have specialized legal advice on hand, proper valuation of the property, and needs to thoroughly investigate the borrower. Once these hurdles have been passed the note will not only serve as an effective investment, but can be used as a cash flow source in case sizeable expenses crop up. DMO is a mortgage note buyer that purchases properly administered mortgage notes, providing cash in return – but the possibility of selling your note requires that it be properly written and administered in partnership with expert advice and a reliable borrower. Once you have these, you have maximum flexibility to use it as an extended investment or a cash flow source.
DMO Direct Funding is a mortgage note buyer that accepts mortgages notes, land contracts and trust deeds from throughout the United States. Contact DMO for a free quote if you plan to sell mortgage notes.
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