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The most repeated mistake that a real estate note holder gets in my judgment begins when the note holder starts to put the note together. What they do, or I believe I should say what typically does not happen is checking the buyers credit report to determine a credit score ahead of putting your signature on that mortgage note. When I first started seeing this practice,  I really was quite shocked, and now that I have been in the note buyers - note selling business for sometime I see this not checking the buyers credit score business more times than I care to count..

What the real estate note holder does not realize is that checking the buyers credit score would save him/her money both in the present and also down the line.

How is that you ask? Well let me start-off by saying that checking the possible buyers credit score will put your mind at ease, just knowing that the probable buyers credit is good and you are pleased that the buyer will be able to pay the debt back to you. I don’t know where this idea of not checking the probable buyers credit report comes from, but I myself have not at any time applied for credit without having someone pull up my credit report.

The other way that checking the buyers credit report benefits you is if in the future you feel like you would like to sell a Mortgage note, promissory note, contract for deeds, or just about any type of cash flow note and turn it into a cash lump sum. By checking your buyers credit score when you first put together the note, you actually made your note worth more years down the line.

The reason for this is that when you are prepared to sell your mortgage note one of the things that the note buyer is going to expect from you is the payors (i.e. this would be the individual that is making payments to you) credit score info. The thing about it is that to the note buyer, the greater the buyers credit score, the more exceptional the offer will be when you go to sell a real estate note anywhere.

The buyer, or people making payments to you on your note, their credit score will be one of the big parts of the equation that the real estate note buyer will consider when determining how much to offer to you when you sell a real estate note. The reason this is such a large factor is that the note buyers perspective is the more healthy the credit score the less risk there is in buying this note. So as you can see checking the possible buyers credit score in advance of you signing a note can make you money in the future.

Ok, I know what you want the answer to! When we talk about what is an adequate credit score, when we are talking about promissory notes, mobile home notes, real estate notes, deeds of trust, or cash flow notes of almost any type? Myself I would not accept a payor’s credit score that is less than 565, but this is something that needs to be worked out by both the note holder and the note buyer.

When you sell a real estate note, the higher the score is, the more the note buyer will be able to offer you. Very important: The payor’s credit score is going to make up approx 35 to 40 percent of how the note buyer estimates the value of your note. So what you should do is to regularly remember when you are putting a note together, make sure that you check the possible buyers credit score, because it will be more profitable for you in the future.

If you are looking to sell a real estate note , or are just looking for more information on selling real estate notes, selling mobile home notes, selling mortgage notes, selling trust of deeds, or selling cash flow notes. Please come by our website as we have all the information you are looking for, and our staff is very helpful.

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