How To Sell Private Mortgage For 100%. Yes, I Said Sell A Mortgage Without A Discount
A lot of investors and brokers in my industry probably think I’m crazy for making this post but I see a lot of private mortgage sellers frustrated that they can’t sell an owner financed mortgage because of their borrowers credit or that they can’t get enough money due to a steep discount also due to their borrowers credit scores.
To help, private mortgage holders, I’m going to show you just how to sell a mortgage for 100 percent. That’s right sell a mortgage note with no discount. (technically you aren’t selling the mortgage, you’re just getting it paid off at 100%. Read on…
OK, the steps you need to go through (yes there is some work involved but the payoff can be huge!) for getting 100% for a private mortgage is assuming that 1) your buyer has put down at least 10%, 2) the property has not lost value since the sale, 3) the interest rate on the note is at least 7% (that way, they have incentive to cooperate) and they have sufficient income that can be documented to qualify for a standard FHA mortgage refinance.
I would then talk to your buyer and ask them if they would be interested in lowering their interest rate to 5% or even lower. Assuming they are interested, you explain that they need to help you get their credit scores to FHA acceptable levels. Don’t worry, they don’t have to do much work.
The next step in the process is for you to find a good FHA approved mortgage broker (Get a referral from a trusted person. Don’t just look one up on the internet as just like in any other profession there are good ones and bad ones.) who can take an application and pull credit. Once the credit and application are done, you want the broker to tell you whether your borrower can get an FHA loan based on their application and information on the property, including verification of critical components and if so, what would their credit scores need to be to be approved for an FHA refinance mortgage.
If all of this goes well, you will need to hire a trusted credit restoration firm. The process will take anywhere from 30 days to 120 days depending on how bad your buyer’s credit is. The link below is to a good one, with guaranteed results. The cost is $499 for 1 person and $399 each for two people. (You might even want to have the borrower chip in for extra incentive. I would consider these fees insignificant compared to the discount if you sell a mortgage note, assuming you can sell your mortgage at all. Link is below. Check it out. Credit Restoration Specialists.
So there you have it, how to sell an owner financed mortgage with no discount.
One additional comment, if for some unforseen reason, the credit repair company gets your buyer’s credit up significantly and their loan falls through anyway, you should be able to sell a mortgage for significantly more than with their previously bad credit scores.