BiggerPockets

Structuring a Great Selling Mortgage Promissory Note!

Thursday, April 23

Making your promissory note attractive to potential investors is important. Some things to consider when putting your mortgage note together are:

• Interest Rate - In some states, like Arkansas, there are usery laws in place that prohibit interest rates in excess of 10%. However, when writing the terms of your mortgage note, remember that the investor buying your mortgage note would most likely be attracted to a higher interest.
• Terms or Number of Payments - Historically, the dollard has lost value. Meaning, the dollar is worth more today than it will be worth in, say, 30 years from now. Keeping that in mind
• Payor's credit - The payor you sell your home or land to is probably seeking an owner financed mortgage note because they can't go to the bank. This isn't always the case but, keep in mind, the payor's credit weighs considerably when it comes time to sell your promissory note or mortgage note.

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