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About Mortgage Notes and What to Expect When Buying

Sergio Garcia, Real Estate

A real estate professional, Sergio Garcia possesses more than 27 years of experience in the Northwest Indiana and Chicago areas. Sergio Garcia, a sales manager at Chicago Real Estate Leaders, specializes in buying residential mortgage notes.

A mortgage note is a binding agreement between a borrower and a financial institution lending him or her funds to purchase a property. Secured by a mortgage document showing transfer of title, it states the amount borrowed as well as the type of loan used, such as an adjustable rate mortgage or interest-only loan.
A note can be sold from one investor to another at any given time and typically does not impact the borrower. Much like a bank, a person or entity acquiring a note takes on all risks, including the possibility a borrower will not repay their loan, necessitating property seizure. However, the new note owner benefits from receiving monthly payments for the life of a loan and a higher rate of return.

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