It is not always a financial institution like a bank that holds the note for a mortgage; it can be an individual or even a group of investors. If this is the case, you may find that they are willing to sell. If you are in a position that makes buying mortgages seem like an attractive proposition, then this could very well be the way forward for you.
buying mortgages takes a lot of research and is not something to be jumped into lightly, but often these alternative financiers would much rather have a lump sum rather than monthly payments that can take years to realize. If that is the case you may find that buying mortgages this way will get you a bargain because they may be prepared to let them go for a sum that is greatly reduced in comparison with the actual amount on the note.
The first decision you have to make if you decide that buying mortgages is for you is to decide what kind you of mortgage you wish to buy. Once you have done that, the next step is to find them. As a potential investor, you could advertise your desire for buying mortgages in local papers. You can also do a public records search to find out who holds a mortgage, and approach these people directly. The correct place to search for these public records is different from county to county but the first place to ask is the property appraiser’s office.
Once you have found out who may be willing to sell you their mortgage, you must go about the process carefully and properly. You need to speculate to accumulate, so hire a professional to inspect the property that you are interested in to discover whether it is actually worth what is outstanding on the mortgage. You should only deal with properties that have a positive equity so that you have something to fall back on if things go sour later on.
buying mortgages means that you will need to look at the payment history on the mortgage up to that point; you should only go after a mortgage that is not in default. You should also check out the credit history of the borrower; remember you are buying the mortgage not the house so the person will owe you once you have bought it. Make sure that you do a title search so that you can be certain that no other party can lay claim to the property.
Once all that is done and you are sure you have found the right mortgage, hire an attorney who has lots of experience in buying mortgages so that you can be confident that your interests are being looked after by an expert.
The last thing to remember when you are buying mortgages is don’t ever let yourself be carried away by the whole thing and be rushed into a sale. You are making a huge financial commitment and need to be sure it’s the right decision for you.