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Cash-strapped homeowners eye equity sharing

Reverse mortgage alternatives charge zero interest, reduce upfront costs

The soft national housing market and chaotic mortgage environment has sent lenders and investors back to the drawing board in an effort to sharpen their pencils and produce an alternative to corral new business. The latest niche product designed to tap the trillions dollars of equity tied up in seniors' primary residences has spread not only to second homes but also to residential rentals and commercial properties. Equity Key has rolled out an equity-share option that differs from a reverse mortgage in that the program does not charge interest on money taken out of the home. Instead, it gives Equity Key an equal share in the future appreciation of the property based on its present market value. The concept is similar to the Rex Agreement, another new equity-sharing vehicle that also claims a share of future appreciation. The main differences are that the Rex Agreement has no age restriction while Equity Key is aimed at homeowners between the ages of 65 and 85. The Rex Agreem...

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