By Clayton Davis | Published on Sep 26, 2025
If you've sold a property and are carrying the financing, you're part of a growing trend in real estate. In 2024 alone, the seller financing market reached over $30 billion, highlighting its popularity as a flexible way to close deals. However, holding a mortgage note isn't always the right long-term strategy. If you need a lump sum of cash for debt payoff, new investments, or major expenses, selling your mortgage note can be a smart move.
This guide covers everything you need to know about selling your mortgage note in 2025: the benefits, step-by-step process, key valuation factors, and how to select a reputable buyer to maximize your payout.
Why Sell Your Mortgage Note?
- Access a Lump Sum of Cash: Convert small monthly payments into a significant upfront payment to pay off high-interest debt, cover medical costs, fund education, or invest elsewhere.
- Eliminate Risk: Transfer default and market risks to the buyer instead of carrying them yourself.
- Simplify Your Finances: Avoid administrative work like collecting and tracking payments, insurance, and late fees.
- Capitalize on Opportunities: Use proceeds to move quickly on new investments when timing matters.
The Process of Selling Your Mortgage Note
- Gather Your Documents: Compile the original purchase agreement, promissory note, and closing statement so buyers can evaluate your note.
- Request a Free Quote: Reputable buyers provide no-obligation quotes so you understand price expectations.
- Due Diligence: The buyer reviews the note, borrower, and property, which may include a property valuation and credit review.
- Receive a Formal Offer: After diligence, you'll get a written purchase offer outlining pricing and terms.
- Closing and Funding: Sign closing documents and transfer the note. Once closed, you receive your lump sum payment.
Factors That Affect the Value of Your Note
| Factor | Description | Impact on Value |
|---|---|---|
| Interest Rate | The interest rate on your note. | Higher rates generally increase value. |
| Loan-to-Value (LTV) | Ratio of loan amount to property value. | Lower LTV reduces risk and increases value. |
| Borrower Credit Score | Borrower creditworthiness. | Higher scores indicate lower default risk and increase value. |
| Payment History | On-time payment track record. | Consistent on-time payments increase value. |