Selling vs. Keeping Your Mortgage Note

Wise money managers know that investing in mortgage notes can be a very lucrative endeavor. Property values tend to increase, and it is one of the best ways to create long term wealth and help with retirement expenses. If you are holding mortgage notes, you may be unsure if you want to keep them for the long run, or to sell them as the price increases and reinvest. Commercial note buyers often buy and sell notes in the short term so they can take advantage of the rise and fall of the market price.

Keeping Your Notes

There are plenty of great arguments for holding onto your mortgage notes. Many people count on their mortgage notes as a way to see them into retirement. The income from the monthly payments can be beneficial in budgeting for your monthly expenses. It allows you to supplement your existing pension and social security and hopefully give you a little extra for fun things to do. 

Another thing to consider is the rising property values. As property values increase, so will your mortgage note. If you are unsure how much your current property is worth, you can consult sites like Zillow. Zillow can give you a rough estimate of current pricing. However, if you begin the sales process, you will get a more precise selling value quote. Other factors may compel you to hold onto your note, such as the buyer’s credit score increasing and payment history improving. Both of these have a direct impact on the value of your note.

Selling Your Note

Selling your mortgage note has many benefits. Many people grow tired of collecting payments from buyers. It can be especially tricky when the buyer is a slower payer or even falling into default on the personal loan. The stress this causes sometimes will move people to want to sell the note. It is essential to know that payment history does affect the value of your mortgage note. The other thing to worry about is whether the property taxes and insurance have been kept up to date. This is critical to you protecting your investment.

Another reason people may want to sell their mortgage note is when they require a large sum of cash. Selling your note is a fast way to secure your money to make that large purchase or pay down unexpected debt. It is much wiser to sell your note rather than borrow money and pay interest when you have the funds available to you. Also, if you have higher interest rate credit card debt, selling your note is a great way to pay your way out of that expensive debt. You can then reinvest into notes to rebuild.


Some people opt for a combination of selling and holding. People who need to generate some liquid cash may elect to sell off a portion of their note to raise the capital necessary. They then retain a part of the note and will continue to collect their monthly share of the payments the buyer makes.