The details of your agreement can vary greatly. Typically you can get around 10-15 percent of your home’s current value. And, in exchange, you will give up a percentage – up to 50 percent – of the future change in your home’s value.
Please continue to the Home Equity Conversion Overview for an example of the upfront cash available and what is paid to the Real Estate Investment Company when the agreement is terminated.
More states are being added, but Home Equity Conversion products are currently available in:
In most cases, you will fund a third party home appraisal to determine the current value of your home.
As the homeowner, you agree to:
Only in rare cases when these conditions are not met will the Real Estate Investment Company take any action to repurchase or sell your home.
If you choose to end your Home Equity Conversion Agreement after five years, it is treated similarly to a sale of the home where a value is established and the homeowner settles up with the company based on their share of the accumulated value of the home.
If you are interested in exiting the agreement sooner than five years, there may be additional fees involved.
Depending on the real estate investment company you deal with, you will probably receive full credit for the market value of any material improvements to your home. Regardless of how much you spend out-of-pocket in improving your home, the value of those improvements as determined by a third party appraisal when you exit the equity financing agreement will be credited back to you.
No. You may continue living in your home, are not required to pay any form of rent and you will continue to enjoy the tax advantages of owning a home. The real estate investment company does not go on your title and they are not considered a co-owner.
No. While both products enable the homeowner to access their home equity, the financials are different between the two products.
A Reverse Mortgage is a loan in which all interest is added to the principal instead of being paid monthly. No interest is paid nor accumulated with a Home Equity Conversion Agreement.
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