Creating a Note?

[Scott Williams]

My understanding of note buying and selling is very vague.

I would like help in understanding if a note could be a vehicle for us to get some cash out of a house without selling or refinancing it.

I understand a note is basically a mortgage or land contract that someone is making payments on, and is bought at a discount for the value of the payments or the property.

We do not have a note to sell as such but do have a property with no lein holders on it.

Here is my situation. My girlfriend and I decided we wanted to go to school and do something different, and we were going to fix up and sell this house to help pay for our career change.

The problem is we got 90% done and we really like the house and neighborhood, and decided not to sell it.

We are both in school full time and not working now, so there is no way we can get a mortgage on the house. Our credit is not great either, so conventional financing will not work for us.

We don't owe any money on the house, and taxes and insurance are up to date. The property is worth around 50k, houses are pretty cheap in this area(Michigan).

We would like to get 10-15k and have the payments spread out over 10 years.

Is there a way we can make this happen(or should I get busy looking for a part time job :lol:)

Thanks, Scott

[Scott Hubbard]

Originally posted by scott williams:

My understanding of note buying and selling is very vague.

I would like help in understanding if a note could be a vehicle for us to get some cash out of a house without selling or refinancing it.

I understand a note is basically a mortgage or land contract that someone is making payments on, and is bought at a discount for the value of the payments or the property.

We do not have a note to sell as such but do have a property with no lein holders on it.

Here is my situation. My girlfriend and I decided we wanted to go to school and do something different, and we were going to fix up and sell this house to help pay for our career change.

The problem is we got 90% done and we really like the house and neighborhood, and decided not to sell it.

We are both in school full time and not working now, so there is no way we can get a mortgage on the house. Our credit is not great either, so conventional financing will not work for us.

We don't owe any money on the house, and taxes and insurance are up to date. The property is worth around 50k, houses are pretty cheap in this area(Michigan).

We would like to get 10-15k and have the payments spread out over 10 years.

Is there a way we can make this happen(or should I get busy looking for a part time job :lol:)

Thanks, Scott

What you really are asking for is a loan using your property as collateral. The lender would look at your current income, credit score, work history in order to qualify you. Your lender would then have a note to sell, not you.

Here is another solution to your problem.

Since you do not want to sell the property, you will want to find a lender willing to loan you money. If your a student and do not have full-time employment, you might find a lender unwilling to take the risk.

Another solution.

If I were you, I would approach family and friends to see if any of them have a self-directed 401K or IRA and may be willing to loan you the money. You can use your property as collateral and repay the loan. The interest they would earn, would go back into their 401K or IRA as tax deferred income.

There are some rules about family members loaning to their relatives, so makes sure they check with their accountant or attorney first.

Also:

If your willing to move and sell your home, you may be able to create a note that way using seller financing (land contract).

Good Luck!