How Much Is My Mortgage Note Worth?
Most mortgage notes sell for roughly 65 to 95% of the remaining principal balance. Where your note lands in that range depends on six factors: the interest rate, the borrower's payment history, the borrower's equity, the note's position, the property type, and the remaining term. The only way to know your exact number is a quote against your actual paperwork, which takes less than 24 hours.
Notes sell at a discount for one reason: the buyer takes on the waiting and the risk that you're giving up. The lower the risk your note carries, the smaller the discount.
The top-dollar note: what buyers pay the most for
A note checks every box when it has:
- 20%+ borrower equity and a borrower who was qualified through an RMLO (Residential Mortgage Loan Originator) when the seller financing was written
- At least 3 months of seasoning, meaning a documented history of on-time payments
- An interest rate of 8%+
- A senior lien, so the note holder is first in line against the property
- Title insurance with a lender's policy protecting the note itself, not just the owner
- Serviced by a third party, so the payment history is independently documented
The closer your note is to that profile, the closer your offer lands to the top of the range. Missing a box doesn't kill the sale; it just shows up in the price.
The six factors that set your note's price
1. Interest rate
A note written at 8%+ is worth more than one written at 4%, because the buyer is purchasing the income stream. Higher rate, stronger offer.
2. Payment history and seasoning
Buyers want at least 3 months of seasoning, and every additional month of on-time payments strengthens the price. A borrower who pays like clockwork makes your note easy to price. Missed and late payments raise the risk and widen the discount.
3. Borrower equity and qualification
The more the borrower has invested, the less likely they are to walk away. 20%+ equity is the benchmark buyers look for, and a borrower who was qualified through an RMLO at origination adds real value because the loan was underwritten, documented, and compliant from day one.
4. Lien position
A senior lien commands the best price because the note holder gets paid first if things go wrong. Junior liens still sell, at a deeper discount. Title insurance with a lender's policy strengthens any position, because the buyer isn't pricing in title surprises.
5. Property type and condition
A note on an occupied single-family home is the strongest collateral. Land, manufactured homes, and vacant properties sell too, with pricing adjusted for how easily the property could be resold.
6. Remaining term and balloon dates
Shorter terms and near-term balloon payments return the buyer's money faster, which supports a stronger price. A 30-year stream of small payments prices lower than a 10-year payoff.
How can I get more for my note?
- Keep clean records. A complete payment history, ideally through a third-party servicer, removes doubt and doubt is what gets discounted.
- Have your title work in order. A lender's title policy on the note is one of the cheapest ways to protect its value. If you don't have one, ask us about adding it during the sale.
- Consider a partial sale. Selling only the next several years of payments usually prices closer to face value than selling the whole note. See partial note sales.
- Don't wait for it to go bad. A note is worth the most while payments are current. If your borrower is wobbling, price erodes with every missed month.
Frequently asked questions
Is there a fee to find out what my note is worth?
No. Quotes are free, carry no obligation, and arrive within 24 hours.
Will I owe taxes when I sell?
Selling a note is a taxable event for most holders. We're note buyers, not advisors, so review the numbers with your CPA before closing.
My note is non-performing. Is it worth anything?
Usually yes. See can I sell a note if my borrower stopped paying.