Seasoning
The length of time a note has been paid on schedule. More seasoning means a longer track record and usually a higher price.
Seasoning is the amount of time a mortgage note has existed and been paid as agreed. A note that has been making on-time payments for two years is described as having "24 months of seasoning." To a note buyer, seasoning is one of the clearest signals of risk — and one of the easiest ways to increase what you are paid for your note.
Why seasoning raises a note's value
At origination, no one knows whether a borrower will actually pay. Each on-time payment is real evidence that they can and will. By the time a note has 12–24 months of clean history, a buyer can underwrite it with far more confidence than a brand-new note where the ink is barely dry. Lower uncertainty means a lower required yield, which means a smaller discount and a higher purchase price.
Seasoning also demonstrates the borrower's habit of paying and shows that the original sale and financing terms were realistic. A note that has survived a couple of tax seasons, insurance renewals, and the borrower's life events is simply more durable.
How much seasoning buyers look for
There is no universal cutoff, but useful benchmarks include:
- 0–6 months: Considered unseasoned. Buyers will still purchase, but expect a deeper discount or may want a partial purchase to share the early risk.
- 6–12 months: Some track record; pricing improves.
- 12–24+ months: Well-seasoned. This is where performing notes typically earn their best offers.
What counts as good seasoning
Not all seasoning is equal. Buyers look at how the payments were made:
- Were payments on time, or routinely late?
- Were they documented through a third-party servicer (strongest), or only by personal records (harder to verify)?
- Were there any modifications, forbearances, or missed payments that reset the clock?
A verifiable, third-party payment history is far more valuable than a seller's word. If you self-service your note, organizing bank deposits, payment ledgers, and any escrow records will help a buyer confirm the seasoning quickly.
Seasoning and non-performing notes
For a non-performing note, seasoning works differently — the relevant history is the default: how long the borrower has been behind, what collection or workout steps have occurred, and the status of any foreclosure. In that case the property and recovery path drive value more than payment seasoning.