What is note lending or hypothecation?
Note Lending
Are You a Private Note Holder in Search of a Lending Solution?
Do you own one or more mortgage notes but prefer not to sell them? Whether you hold a single note or a portfolio, we offer a strategic alternative: use your existing mortgage notes as collateral to access the cash you need today.
We provide loans secured by your performing mortgage notes, allowing you to retain ownership while leveraging the value they hold.
How Note Lending Works
You pledge your existing mortgage note(s) as collateral
We evaluate the note terms and underlying real estate
If approved, you receive a loan without giving up ownership
You continue to earn interest on your notes while gaining liquidity
Why Choose Us for Hypothecation Loans?
We offer flexible and tailored loan solutions based on the strength of your collateral and terms of the underlying assets.
Key Benefits:
Let’s Discuss Your Options
Every note is unique. We take a personalized approach to structure terms that work for you and your investment goals. Contact us today to explore your lending options.
Frequently Asked Questions
Hypothecation means using your mortgage note as collateral for a loan.
You receive cash but still keep ownership of your note.
Your borrower keeps making their normal monthly payments.
You keep the note and the income it produces.
We look at each note and evaluate it by its own merits.
Most loans are 1–3 years and are interest-only.
The interest rate is usually around 12% per year.
We typically lend 50–60% of the note’s balance.
Final terms depend on the quality of the note.
No. The mortgage note itself is the collateral.
We secure the loan with a collateral assignment and UCC filing.
Your home, savings, and other assets are not involved.
The note is the only thing pledged.
Every deal is reviewed individually.
However, we usually prefer notes with at least $100,000 balance.
Larger notes are easier to structure loans around.
But we are always happy to review a note.
Most deals move quickly once documents are received.
You will need the note, mortgage or deed of trust, and payment history.
We also verify taxes and insurance on the property.
Many loans close in about a week.
If the borrower stops paying, the note becomes the collateral.
If payments are not made on the loan, we take control of the note.
We then step into the lender’s position on the loan.
This is standard protection in note lending.
Some note owners want cash but do not want to sell.
Hypothecation lets you borrow against the note instead.
You keep ownership and the future payments.
Hypothecation may allow you to access your capital tax-free because it’s a loan.