A note travels with you. The payments can follow you to any address and a servicer can do the collecting. What a move takes away is your ability to keep an eye on the property and to act quickly if the payer stops, and that is the part to weigh when you decide whether to sell.
What distance changes
A note is a right to receive payments, and it has no connection to where you live. Move from Ohio to Arizona, or overseas, and the payer owes the same amounts on the same dates. Your lien, the claim on the property that secures the debt, stays recorded in the county where the property sits.
| Stays the same | Gets harder |
|---|---|
| The amount, rate and schedule of the note | Seeing the condition of the property |
| Your lien on the property | Collecting a payment that arrives by paper check |
| The rules for enforcing the lien, which generally follow the property | Hiring and meeting a local attorney if the payer defaults |
| Your right to sell the note at any time | Signing documents in front of a notary, if you are abroad |
Everything in the left column carries on without you. Deciding whether to keep the note comes down to how you feel about the right column.
Why a move tips some holders toward selling
The plainest reason is money with a date on it. A down payment on the next home, or the cost of the relocation itself, is a known sum, and a note pays out too slowly to meet it.
The payer is another. Someone who pays when you drop by may pay less promptly once you are three time zones away. If they default, the foreclosure runs in the county where the property is, and you would be hiring an attorney you have never met and relying on written reports.
Leaving the country adds friction of its own. Time differences, international transfers and notarized signatures all take more arranging, and holding a US note is far simpler if you keep a US mailing address and bank account. Some people are also moving in order to simplify, and a note is one more thing to track.
What selling would cost you
A sale means a discount, which is the difference between the balance owed and what a buyer pays. A full sale ends your involvement and takes that discount on the whole balance.
A partial purchase, where you sell a set number of upcoming payments and get the note back afterwards, applies the discount to a smaller slice. For a mover it can cover relocation costs and hand off the collecting during the years you are settling in. The note does come back, though, so a partial suits a note with a dependable payer and an owner willing to be a lender again later. You can see a partial and a full sale priced side by side on one example note, and a known figure such as the cost of the move is the starting point for sizing a partial to a specific cash need.
Taking the note with you
If the note is performing, meaning the payer is paying as agreed, and you like the income, these arrangements shrink the distance.
- A servicer in the middle. A loan servicer collects the payment, keeps the records, sends statements and deposits the money to your account. The payer has one address that never changes however often you move. Ask whether the servicer will also collect and pay the property taxes and insurance from an escrow account, which saves you checking on them from afar.
- Originals somewhere safe. The original signed note is the document a future buyer will want to see, so keep it out of the moving boxes. A safe deposit box, an attorney’s file or a document custodian is better. Keep scans of the note, the recorded mortgage or deed of trust and your payment record where you can reach them from anywhere.
- Your name on the insurance. The property’s insurance policy should list you as mortgagee or lender at your current mailing address, since that is how you learn that a policy has lapsed. Update it when you move.
- Written notice to the payer. Send your new contact details by a method that leaves a record, and if the note says notices must go to a stated address, follow its wording.
Timing a sale around the move
Starting before you leave is easier. You can hand over the original note in person or by tracked delivery from a known address, sign closing documents in front of a local notary, and answer a buyer’s questions with your files within reach. All of it can still be done afterwards by mail and courier, with more coordination, and a holder who lives in a different state from the property is nothing unusual to a buyer.
If your move date is fixed and you need the cash by then, say so at the start and leave room. A buyer has to check the title and the paperwork before funding. Those checks account for much of how long it takes to sell a note, so a closing date promised before they are done is one to be wary of.
A move can also change your tax position, especially a move between states or out of the country. How the proceeds of a note sale are taxed depends on your circumstances and on the rules where you file, so put the question to a CPA before you sign anything.
The property’s state sets the price
Buyers price a note by where the property is. That state’s rules decide how a lender enforces the lien, and buyers build that into their offers, while your own address plays no part. If you already live somewhere else, you are selling a note on a property in another state, and that is no obstacle to a sale.
Before the boxes are packed
Whichever way you lean, settle two things while you still live near your files. Decide where the original note will be kept, and write down the balance, the payment history and the name of the property’s insurer in one place. If you are leaning toward a sale, send us those note details along with your moving date. We will tell you what a full sale would bring and, if the payer’s record allows it, what a partial would raise, so the figures are in hand before you choose. Among the circumstances that prompt a note sale, a move is one where keeping the note costs you little more than some arranging, so there is no need to let the moving date decide it.
Related questions
Does my moving to another state change which state's rules apply to the note?
Generally the rules that govern enforcing the lien follow the property, not the note holder. Your move may affect your own tax position. Confirm both points with an attorney and a CPA.
Can I close a note sale without being there in person?
Yes, it can be done. Closing documents can be signed in front of a notary near you and sent by courier, and the original note is delivered to the buyer or their closing agent. Signing from abroad takes more planning, so raise it early.
Do I have to tell the payer that I am moving?
Tell them in writing where to send payments and how to reach you, and follow any notice wording in the note. If a servicer collects for you, the payer's instructions do not change when you move.