Higher Interest Rates Forecast for Spring 2010 Mortgage Notes - How Seller Funding Benefits |
| The Federal Reserve is forecasting higher mortgage rates by spring of 2010. This is excellent news for anyone considering investing in or selling a private mortgage note. Despite a few discouraging 2009 indicators, it appears that the real estate market is showing the first signs of real recovery as institutions grow more confident in their ability to profit from real estate notes. As their prospects improve, so will those of private note holders. |
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Beyond the obvious ability to improve a return on your investment while staying in line with market trends, recovery includes several additional boons for anyone managing their own seller held mortgage note, trust deed or other instrument. Recovery increases the number of viable investment properties available. During the downturn, anyone interested in setting up a seller-held note had to look carefully at selected markets that bucked the national trend, or invest in properties that met a narrower group of demands. For example, while it was previously preferable to consider multifamily dwellings, single family homes will return as one of the core centers of seller funding.
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| Recovery also provides more flexibility when it comes to setting up a private note's terms. In 2009, seller funding needed to cover for flaws in the institutional system. It had to appeal to borrowers who were excluded from competitive mortgages by a newly-cautious institutional system, or add incentives to make the investment competitive versus declining prices.
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Private notes are now going to attract more people who fit traditional borrower profiles, and will be able to offer terms that do more than justify the agreed upon interest rate. As the institutional rate rises, seller held notes become less of a "carrot" to appeal to reluctant borrowers and more of a mechanism to offer genuine flexibility through options such as balloon payments. Remember that the strategies that worked during 2009 also represent lessons learned, however. Successful seller funding from this period came because private note holders learned about the weak points of the institutional system. Don't disregard the knowledge that came out of this period - use it to harness the recovery to your benefit.
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| Finally, recovery brings with it one additional benefit: Note buyers will expand the range of notes they're interested and over time, offer superior terms to anyone interested in selling their mortgage note. You may not be able to move the last remnants of poorly devised notes from the housing boom, but if you have a sensible mortgage note you'd like to convert into cash flow, a mortgage note buyer is more prepared than ever to make you an excellent offer. In DMO's case, we believe we offer some of the best terms around. See for yourself by requesting a free, no obligation mortgage note quote.
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DMO Direct Funding, 218-A E. Eau Gallie Blvd., #110, Indian Harbour Beach, Florida 32937
Main Office: (321) 777-2833, info@DMODirectFunding.com
Copyright 2008, Buyers of Seller Held Mortgage Notes
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