►Keep and Protect Your Equity.
Why do I need to know about this?
Consider the fact that for most Americans the majority of all household assets are concentrated within their primary residence, which is a largely illiquid asset. We say that makes us house rich, but cash poor.Accessing that liquidity through conventional loans typically involves monthly
fees and interest payments, and/or the potential to lose some, or all, of the equity that we’ve already accumulated.
However, The Home Appreciation Rights Alternative (HARA) gives homeowners the ability to access liquidity in a sensible manner in order to meet a need, fulfill a desire, diversify their portfolios, make strategic investments, or design a financial plan that provides more balance and peace of mind.
Our clients have used the proceeds of this program to:
• Supplement Income
• Make Home Improvements
• Diversify Investments
• Launch a Business
• Fund College Education
• Estate and Tax Planning
Conventional debt-based instruments, including Reverse Mortgages, require homeowners to pay upfront fees and expenses as well as incur monthly fees and interest. The Home Appreciation Rights Alternative (HARA) differs from conventional debt-based instruments in the following ways:
• It is not a loan. No debt is incurred.
• There are no monthly payments.
• No service fees or points.
• No restrictions on how you use the cash.
• Homeowners keep and protect the current equity in their homes.
• No Negative Amortization.
How Much Cash Can I Get?
Qualifying homeowners may receive up to 17.25% in cash based on their home’s current appraised value in exchange for a portion of the potential future appreciation, if any.
What Types of Properties Qualify?
Both primary and secondary homes, and townhomes in CA, FL and NY, are eligible. In some areas, condos are also eligible. We are working to expand this program to additional states, so check back with us to see if your state has been added.
Do I Have to Pay-off My Existing Loans to Qualify?
Homeowners are allowed to keep their existing loans or lines of credit up to a maximum of 63% of the current value of the home.
How Much Does it Cost?
This program is not debt- based, therefore the homeowner DOES NOT pay any points, fees or interest.
The only expense incurred by the homeowner is a third-party appraisal of the current value of their property, which is required during the application process.
Are There Any Monthly Payments?
No. There are no fees, costs nor monthly payments.
How Much of My Current Equity Do I Have to Share?
Zero, None, Nada. This program enables you to keep and protect the current equity in your home.
How is The Value of My Home Determined?
The initial value of your home is determined by an appraisal conducted by an independent appraiser chosen by a third party.
When Does the Agreement End?
The agreement terminates when you sell the home, the last surviving title holder passes away, or 50 years, whichever comes first.
How is Appreciation Measured in This Program?
Appreciation is measured by using Standard & Poor’s Case Shiller Home Index for homes in your geographic area. This is a well-established benchmark, providing reliable and consistent measurement of average home prices.
How is The Appreciation Calculated?
When the agreement is terminated, the change in the index from the start to the end of the agreement is calculated. The amount you owe is based on the agreed upon percentage of the change in the index multiplied by the original appraised value of your home.
How Much Future Home Appreciation Do I Have to Share?
The portion of appreciation shared depends upon the amount of cash you elect to receive.
What Happens if There is No Appreciation of the Index at the End of the Home Appreciation Rights Agreement?
In the event that the Index at the end of the agreement has not increased from the index at the start of the agreement, no appreciation of the index has occurred, and therefore, the homeowner is relieved of his obligation to share any appreciation. This may occur even if your home has appreciated beyond its starting appraised value. In this situation, you keep the appreciation earned by the sale of your home and would only owe back the original cash amount received.
What if the Index Decreases in Value?
In the event that the Index declines, 100% of that decrease will be deducted from the original cash amount received up to the full amount of the money originally paid to the homeowner. For example, if the homeowner was paid $200,000 through the Home Appreciation Rights Agreement, and, at termination, the index had decreased by $200,000, the home- owner would NOT be required to pay back ANY of the original cash received.
What if My Home Appreciates Greater Than the Index?
The homeowner keeps 100% of the home’s actual appreciation, and owes the appreciation of the index. Any over-performance is kept by the homeowner.
What if My Home Appreciates Less Than the Index?
The homeowner keeps 100% of the home’s appreciation and owes the appreciation of the index. Any under-performance of the index is owed by the homeowner.
Can I Refinance?
Yes. You can refinance or take out additional loans on the property, though refinances of existing loans and all new loans must be approved. The structure of your new loan must satisfy current guidelines.
Can I Move?
Yes. There is no requirement that you live in the property, as long as you retain ownership.
To See If You Qualify, Or To Find Out How Much Cash Would Be Available to You:
Call TJ Toll Free at: 800-922-5300 or email: TJ@megadynellc.com
*Megadyne,LLC is a an authorized representative of: EquityKey Appreciation Rights Agreements.