Is this note worth buying ?
I am trying to get my feet wet on the note business. Here is something that i offered and the seller accepted my offer. (Have one last chance to backout if need be).
UPB: $8226.36
Monthly payment: $596.50
Remaining number of months: 14
BPO: Approx $900K
Note rate 5%
Maturity date: 12/10/2016
30 year Note originated in 1987 !!!
Offering: $5800.00
Servicing fee: $85/month ($1190 for 14 months)
Rate of return : 21% ?
((8226-5800-1190)/5800)*100 = 21%.
Am I calculating it correctly ?
Are there any other costs involved when the buyer pays off the loan?
One more thing i noticed in the due diligence package is that, there is an affidavit of lost note. Should this be a concern ?