Full Note Sale vs. Partial Note Sale: Which Is Right for You?
Selling the full note gets you the most cash today and a clean exit. Selling a partial gets you a set amount now and lets you keep the rest of the note. Here is how to decide.
What Is the Difference Between Selling the Full Note and Selling a Partial?
The main difference is that a full note sale transfers every remaining payment to a buyer for one lump sum, while a partial sale sells only a set number of upcoming payments (like the next 60) and the rest of the payments come back to you.
With a full sale you get the larger lump sum and you are done with the note. With a partial you get a smaller lump sum now, and when the sold payments run out the remaining payments return to you.
Choose a full sale if you want the most cash and a clean exit. Choose a partial if you need a specific amount of cash and want to keep the back end of the note.
Full Sale vs. Partial, Side by Side
| Full note sale | Partial note sale | |
|---|---|---|
| What you sell | Every remaining payment | A set number of payments (for example, the next 60) |
| Cash today | The larger lump sum | A smaller lump sum |
| What you keep | Nothing. You exit the note | The payments after the sold stretch, and the note once the partial period ends |
| Who receives payments | The buyer, from closing on | The buyer during the partial period; then they come back to you |
| Where the discount applies | The whole remaining balance | Only the payments you sell |
| Your involvement afterward | None | Until the partial period ends |
| Fits when | You want the most cash now or a clean exit | You need a set amount and want to keep future income |
| Main thing to weigh | You give up every future payment | You carry the risk the borrower stops paying before the back end returns |
A Simple Example
Say a note has 200 payments left at $1,000 a month, and the borrower pays on time. The payments add up to $200,000 over the life of the note.
In both cases the lump sum is less than the total of the payments sold. The buyer is paying today for money that arrives over time, and taking on the risk that it does not. How much less depends on the borrower’s payment history, the property, the interest rate and the lien position.
Round numbers to show the structure. This is not an offer or a price quote.
When Each One Makes Sense
A full sale fits when…
- You want the most cash from this note today.
- You can put the cash to work at a return higher than the discount costs you.
- You want out: no servicing, no borrower calls, no risk of the borrower stopping later.
- The note is not performing, or the payment history is uneven. Partials are typically built on notes where the borrower is paying, so a full sale is often the practical route.
A partial fits when…
- You need a specific amount of cash, not the whole value of the note.
- You want to keep receiving income after the partial period ends.
- You want a smaller discount. Selling only the nearest payments usually costs less than selling the whole note.
- You are comfortable that the borrower will keep paying through the back end of the note.
Ask Before You Sign
- Get both offers in writing. A full-sale offer and a partial offer, side by side.
- Compare the lump sum to what those payments are worth to you. The gap is the discount. Read why notes sell for less than face value.
- Ask what happens if the borrower stops paying during a partial. Buying the partial back or replacing it with another of equal return are common answers. Get it in writing.
- Ask who services the note and splits the payments, and what that costs.
- Ask how the partial is documented and exactly what comes back to you at the end.
How JKP Holdings Handles Both
JKP Holdings buys full notes and note partials, performing and non-performing, first and second position. There are no upfront fees, and you get a free written offer within 24 hours. Ask for both a full-sale and a partial offer and compare them. We have bought notes since 2010 and have transacted hundreds of them. We buy directly in 17 states and place notes in other states through our buyer network, so any state is considered.
Full Note vs. Partial: Common Questions
What is the difference between selling the full note and selling a partial?
A full note sale transfers every remaining payment to the buyer in exchange for one lump sum today, and you are done with the note. A partial sale transfers only a set number of future payments, for example the next 60 payments on a note with 240 left. You receive a smaller lump sum now, and the remaining payments come back to you when the partial period ends.
Which pays more, a full sale or a partial?
A full sale pays more cash today because you are selling everything. A partial pays less today, but you keep the payments after the sold stretch. If the borrower keeps paying, the total you collect over time can be higher with a partial, and the cash you get up front is lower.
Do I still own the note after a partial sale?
You keep the back end of the note. You sell the right to a defined number of payments, and when that period ends those payments return to you. Exactly how it is recorded is set out in the agreement, so ask to see it before you sign.
Can I sell a partial on a non-performing note?
Partials are typically built around performing notes, because the buyer is counting on payments arriving during the partial period. If the note is not performing or the payment history is uneven, a full sale is usually the practical route. Send us the details and we will tell you which options fit.
Is the discount smaller on a partial?
Often, yes. Selling only the nearest payments usually costs you a smaller discount than selling the whole note, because less time and less risk are involved. The exact number depends on the borrower's payment history, the property, the interest rate and the lien position.
What happens if the borrower stops paying during a partial?
It depends on the agreement, which makes this the most important question to get answered in writing before you sign. Common approaches include the seller buying the partial back or replacing it with another partial of equal return.
How many payments can I sell in a partial?
As many as you and the buyer agree on, and the number is fixed in the agreement. A common example is the next 60 payments on a note with 240 left, but it can be more or fewer. The more payments you sell, the larger the lump sum and the less of the back end you keep.
Can I sell more than one partial from the same note?
Sometimes. It depends on how the first partial is documented, so ask before you sign the first one. Telling the buyer up front that you may want a second partial later keeps the first deal from blocking it.
What happens if the borrower pays the note off early during a partial?
The agreement decides, so ask before you sign. The usual goal is that the buyer is made whole for the payments they bought and the rest of the payoff goes to you. Get the exact formula in writing.
Who collects the payments during a partial?
The borrower still makes the payments, so someone has to split them. A servicer is often used to send the sold payments to the buyer and the rest to you. Ask who does it and what it costs.
How do I get offers on both a full sale and a partial?
Send your note details through our sell-my-mortgage-note page. JKP Holdings gives a free written offer within 24 hours. Ask for both a full-sale offer and a partial offer so you can compare them side by side.
