Estimated reading time: 5 minutes
Most people think of a mortgage as a vehicle for buying a home, not an investment. Often times, someone selling a home actually ends up financing the buyer’s purchase and “takes back” a note. They serve the same function as a bank and are called the “note holder”. After several years they may decide to sell their note and use the proceeds for another purpose like paying for a child’s college tuition or buying a new car. They can sell the note on one of several exchanges where note brokers purchase and hold them for their own portfolio or resale. When you invest in a note you become “the bank”.