Limited Equity-Share: A Short Question and Answer
Q: How old do I have to be and how long do I have to own my House to qualify?
A: You must be at least 18 years old and you may qualify as soon as you take title to your home.
Q: Is the Limited Equity-Share Agreement a loan?
A: Absolutely not. There are no interest charges and no monthly payments, ever. It is simply an alternative to mortgage debt such as a Home Equity Line Of Credit, a second mortgage a Home Equity Conversion Mortgage or a Reverse Mortgage.
Q: Does my house have to be free-and-clear to qualify?
A: Absolutely not. You can have up to two mortgages on your primary home currently and still qualify for an Limited Equity-Share program. If you want to use a vacation home for the 30-year program, it will need to be lien-free. However, if you want to use second homes or residential investment properties up to four units, you may qualify with or without existing liens on the property for a 10-year term.
Q: How does a 30-year Limited Equity-Share Agreement work?
A: The Agreement lets you sell a share of your property’s future change in value (up or down) when you sell, in exchange for the certainty of cash today. The provider is making an investment in your property and standing right alongside you, believing that in the long term the change in value when you sell will bring a fair return on their investment. In summary, when you sell, if your home goes up in value, the provider shares in the gain. If your home goes down in value the provider shares in the loss. The upfront cash payment to you is called an Option Investment Payment
Q: How much do I have to share in the future when I sell?
A: The share of the change-in-value depends upon the amount of cash you want to receive. You can choose to take less cash now and share less when you sell. Here are some examples.
20.00% / Share determined on a case-by-case basis.
17.50% / Share would be 70.00% to the provider and 30.00% for you.
15.00% / Share would be 60.00% to the provider and 40.00% for you.
12.50% / Share would be 50.00% to the provider and 50.00% for you.
10.00% / Share would be 40.00% to the provider and 60.00% for you
7.50% / Share would be 30.00% to the provider and 70.00% for you
5.00% / Share would be 20.00% to the provider and 80.00% for you
20.00% / Share determined on a case-by-case basis.
17.50% / Share would be 70.00% to the provider and 30.00% for you.
15.00% / Share would be 60.00% to the provider and 40.00% for you.
12.50% / Share would be 50.00% to the provider and 50.00% for you.
10.00% / Share would be 40.00% to the provider and 60.00% for you
7.50% / Share would be 30.00% to the provider and 70.00% for you
5.00% / Share would be 20.00% to the provider and 80.00% for you
Q: What is the term (length) of an Agreement and when do I pay the Option Investment Payment back?
A: The Agreement term is thirty years in length. You do not have to pay back the Option Investment Payment until you sell, move, or die. For death, right of last survivor applies.
Q: What fees are associated with the Agreement? And, are any payable out of the homeowners pocket?
A: 30-year program
The program has a Transaction Fee equal to 3.9% of the amount given to the homeowner. Out of this fee, the provider will pay ALL costs associated with the Agreement including third-party costs such as Appraisal, Property Inspection, Title Insurance and Escrow fees. No other fees or costs are due from the homeowner and the provider will simply deduct this fee from your proceeds prior to disbursement. So for $100,000.00 the fee would be $3900.00. The Transaction Fee has a max cap of $14,000 per transaction.
A: 10-year program
The program, has a Transaction Fee equal to 3-5% for processing and an escrow fee that are deducted from the funds the homeowner receives. The homeowner must pay for an appraisal fee out of pocket to a third party, typically around $550. Appraisal and escrow costs can vary depending upon the size, complexity, and location of the property.
The program has a Transaction Fee equal to 3.9% of the amount given to the homeowner. Out of this fee, the provider will pay ALL costs associated with the Agreement including third-party costs such as Appraisal, Property Inspection, Title Insurance and Escrow fees. No other fees or costs are due from the homeowner and the provider will simply deduct this fee from your proceeds prior to disbursement. So for $100,000.00 the fee would be $3900.00. The Transaction Fee has a max cap of $14,000 per transaction.
A: 10-year program
The program, has a Transaction Fee equal to 3-5% for processing and an escrow fee that are deducted from the funds the homeowner receives. The homeowner must pay for an appraisal fee out of pocket to a third party, typically around $550. Appraisal and escrow costs can vary depending upon the size, complexity, and location of the property.
Q: What are the next steps? And how do I find out if I qualify?
A: Express your interest by phone to Mathius Marc Gertz 310-447-5266 or by filling out the Quick Quote page . He will reach out to you and ask you a few qualifying questions. If you seem to be a good candidate, Marc will then introduce you to an intake specialist to guide you through the application process and expedite the closing. Please feel free to look at the other information on Limited Equity-Share programs on this website.
Q: How long is the process from start to finish?
A: The whole process takes approximately 30 to 45 days
* For homeowners interested in short term programs, a ten-year plan with flexible termination options in the first three years is available. Ask for details.