Q&A: Is it possible to buy my own mortgage at a discount?

Question by great_and_mighty_adam_levine: Is it possible to buy my own mortgage at a discount?
I have one of those loans that banks don’t want anymore. It’s a 5-year interest-only ARM. However, I bought this on purpose, and have the ability to pay.

My mortgage company just sold my mortgage (not unusual). However, considering the timing and the type of loan it is, I am assuming they sold it at a hefty discount. I’m paying under 4% interest-only payments for five years (I paid a lot of points), and after those five years are up, I have adequate credit and equity to refinance, or I might just have the cash. So, the new mortgage lender can count on under 4% interest for less than 3 years.

My question is, if banks are willing to sell my mortgage at a discount, is there any way for me to buy it? Would it help if I thrashed my credit first?

–>Adam
It seems my question needs clarification.

I would be a fool to payoff this mortgage now at full price. I’m paying under 4%. I calculated the points I paid as yielding a rate of return of 12%, but if I don’t keep the loan a full 5 years, the points were a major rip.

However, if I could buy my mortgage for significantly less than my payoff balance, I would consider it. In today’s market, my mortgage would be sold to another mortgage lender for a BIG discount, so why not sell it to me for a (presumably smaller) discount?

Best answer:

Answer by Pojo
You have already done a couple of bad things, IMHO, by paying points on a interest only loan why futher the irresponsibiltiy by trashing your credit.

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