The risks associated with mortgage notes are similar to risks that attend traditional mortgages. The greatest risk is that the buyer will default on the contract, which leads to a second, corollary risk. If the buyer has a poor credit rating, this indicates that the loan may not be repaid on schedule. In turn, the prospect of a loan default presents the greatest risk: The seller may have to go without receiving income from the property until another buyer is found.
The good news is that all risks associated with a mortgage note can be eliminated through a full mortgage note sale. After the sale is complete, the mortgage investor assumes full responsibility for the risks, allowing you to have peace of mind with your payment.