ALL ABOUT NOTES
NEWSLETTER – February 2026
Welcome to February! We hope you liked last month’s newsletter focusing on Maintaining your Note with a focus on the annual efforts!
With this the February Newsletter, we will be talking about ways to Set-Up your Note on Day 1 to ensure success from the beginning to the end of your loan. Focus items will be on initial steps in setting up your Note, negotiating the terms and the importance of selecting the right professional to help you in the creation process!
Please read on to learn more about what you should be doing to Set up your Note for success!
MONTHLY FOCUS ITEMS
How to set-up your Note to ensure success and maximize future value!
So you have decided to sell your home with seller financing, how do you structure the note to help you maximize your investment? What can you do on day 1 that will help you during the duration of the loan? If I decided to sell, what can I do now to get the highest offers?
Negotiating the right Note Terms is key to your investments long-term performance!
The strength of a note is not accidental—it is engineered. By negotiating the right down payment, interest rate, and loan term, investors can control risk, increase value, and create predictable income. Learn how to set up the terms of your Note to ensure future success!
Why Use Professionals When Creating a Mortgage Note?
Seller financing offers flexibility with agreement of terms and can provide attractive returns. However, the true strength of a mortgage note lies in its structure. Using professionals during note creation transforms a simple agreement into a secure, compliant, and investable asset.
BEST PRACTICE TIPS
Add servicing fee to note at creation
When creating your Note, add a clause in the Terms to cover 3rd party servicing fees. Having the borrower cover the servicing fees is allowed and common.
By using a servicer, you will free up more time, ensure a professional is working with your borrower collecting payments and gain a knowledge source during the lifetime of your loan!
Require Escrow in the original terms
When creating your Note, add an escrow option. Even if you do not require days 1, having the ability to require the borrower to pay escrow will help you and the borrower.
Major banks require escrow for most loans, especially for down payments less than 20%. By using escrow, you eliminate the concern about taxes and insurance getting paid and help the borrower to better manage their budgets for the year!
Importance of the original Note
When you create a Note, the actual physical Note should be considered legal tender and securely held for the duration of the loan. Using a fire proof safe or safety deposit box to hold your Note is considered best practice.
If you decided to sell your Note, the original will be required to transfer at closing. Holding the Note is just like holding money in your hand….so treat it the same way!!
MARKET NEWS * (01/29/26)
Mortgage Rates Remain Lower and Steady
Mortgage rates remain near their lowest levels in three years, which is encouraging for potential homebuyers who have waited to enter the market for some time. Lower rates, combined with strong income growth, have led to a steady increase in purchase applications compared to last year. More homeowners refinancing their mortgages are also benefiting from these lower rates, as shown by the rise in refinance applications over the past year.
- The 30-year fixed-rate mortgage averaged 6.10% as of January 29, 2026, up slightly from last week when it averaged 6.09%. A year ago at this time, the 30-year FRM averaged 6.95%.
- The 15-year fixed-rate mortgage averaged 5.49%, up from last week when it averaged 5.44%. A year ago at this time, the 15-year FRM averaged 6.12%.
* Source – Freddie Mac
Our goal with the monthly newsletter is to combine some unique insight, helpful tips and market information in an easy-to-read format to help you with managing your Note investment. We have been working with Note investors for years and hope that this insight is helpful and on point!
We hope you have enjoyed this month’s newsletter and found some interesting items to help you to manage your investment in Notes!
THE PEAK-NOTES TEAM
John Knoblich
Karen Worthington
CONNECT WITH PEAK NOTES
NEWSLETTER
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