Are You a Homeowner?
Typically, the largest personal asset and investment for households is their home.
While the purchase of the home is a grand achievement, the home and its hoped for appreciation represents a source of wealth that ultimately can be used for education or health care expenses, retirement funding and supplementing fixed income, business investment or for covering large expenses.. Unfortunately, until now the only way to access one’s home equity has been to borrow against it, increasing the level of debt against the property and incurring a monthly payment. Common examples include a home equity loan or line of credit, or for seniors – a home equity conversion mortgage, commonly called a reverse mortgage. These loan products, as with purchase money mortgage loans, do not take any risk of the home’s value changing, and are required to be paid in full upon a maturity date or the sale of the property. We believe that a new form of funding to access one’s home equity is needed, namely equity. In other words, rather than increasing the level of borrowing against the property, we facilitate the sale of a minority equity interest in the property to our investor network. Such investors are seeking to participate in the future appreciation of the property, but as an equity investor, they also share in any erosion of value. Therefore we believe that homeowners should consider equity financing as an alternative (and often better) option to debt.
With equity financing, homeowners can:
- Access the equity in their home without borrowing and the accompanying monthly payments of debt
- Release funds which can be used for many reasons –
- Investment diversification
- Education expenses
- Healthcare expenditures
- Refinancing high interest credit cards, automobile loans, and student loans
- Supplementing fixed income
- Retirement funding
- Home improvements
- General consumption (e.g., vacations, automobiles)
- Share the future price risk of their property value with a qualified investor, unlike a mortgage lender