Selling my note. Does it help if I have a balloon date in the note?

Or, do you like to see notes that have 25-30 years of payments left?

Balloon date or maturity date = good thing.

25 to 30 years of payments remaining = not so good.

Reason: To a note buyer, the YIELD on their investment in the note is what will (in part) determine the pricing of the note.

What is YIELD?

Yield to the note investor is the return divided by the investment.

The quicker the payback the higher the yield to the note investor.

All notes are purchased at a discount from the face value of the note...

Having a balloon date or early maturity date is similar to a previous post about the payment
amount (the larger the monthly payment, the better). It all relates to the quicker the payback on the note, the better yield for the note investor.

Concern: The balloon date or maturity date must be "realistic." If the payor on the note is an unemployed "F" credit borrower, it is not realistic for him to re-finance the note in 2 months.

If the borrower cannot perform, the balloon date is a bad thing...

Confused?

I don't blame you...