Learn to Profit from Notes with Paper Assets Capital
Our educational materials are set up to help you better understand everything you need to know about buying and selling notes.
How are the values of notes determined?
Asset valuations are often complicated because there are several factors which impact the value of the note. Some of the most common factors that go into note valuations include the property collateral including value and condition of the property that is securing the loan, whether the property is owner occupied or rented/leased, the borrower’s credit and employment history.
Other factors that come into play include the term of the underlying note, the interest rate and whether or not there is a balloon payment. Past history including whether or not payments are made in a timely manner, whether there is an uncured delinquency and the length of that delinquency will also factor into the valuation of the note. Other conditions such as the length of time the note has been outstanding and how long payments have been made and are current. These factors all go into valuing a note.
It is also important to note that the lien position of a note impacts its value. First mortgages are typically valued higher than second mortgages.
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