Equity key is a new innovative way for seniors between the ages of 65 and 84 to access their equity without incurring additional debt or doing a reverse mortgage. If qualified each spouse can access between 12-15%~ (totaling 24-30% see proceed-calculator) of the homes current value in the form of a lump sum or an annual stipend in exchange for a percentage of their homes future value. If one spouse participates then 50% of future appreciation is exchanged or if both participate then 100% of future appreciation is exchanged while still preserving the current equity. A minimum of 30% equity or 70% loan-to-value (ltv) is also required. This allows someone to convert the uncertain future appreciation into certain debt-free money today.
All with no credit qualifications, no income requirements, and no payments.
Unlike a reverse mortgage one can qualify for the program on a primary residence, second home, investment property and/or commercial property. The property must be worth a minimum of $500,000, however two or more properties can be combined in order to achieve the $500,000 minimum.
Here is an example of how the program works:
Home appraised at $1,000,000 and current equity is locked in to homeowner(s).
Remember EquityKey does not touch their current equity that has taken so long to work towards.
Current Mortgage of $700,000 or home is paid off. (Remember this is NOT a mortgage)
*Must be on an interest only or amortized mortgage. An option arm can only be used if the max balance potential does not exceed 70%)
Husband qualifies for key of $150,000
Wife qualifies for key of $150,000
$300,000 total lump sum to do as they choose.
Home appreciates to $2,000,000
a.) Participant or heirs choose to sell the home after 10 years.
-The first $1,000,000 is the participant or the estates then the $1,000,000 in appreciation is EquityKeys
b.) Both spouses pass away. Heirs can buyout EquityKeys share by refinancing, cash from life insurance proceeds(if they have one), or by selling the home.
In order for EquityKey to protect itself the participant(s) must qualify for a life insurance policy whereas EquityKey pays for premiums and is named the beneficiary. The policy provides the ability to purchase the home in the unlikely event heirs do not have the ability or don’t want the burden of listing the home.
Some certified EquityKey brokers recommend talking with a financial planner on investing some or all of the lump sum into their own high-dividend paying life policy not only for income but as a tool for the named hiers to buyout EquityKey.
The program is also referred to as “The Equity Exchange Program” or “Equity Choice” and is currently available in CA and NY.
Please consult an EquityKey certified professional for greater details
FAQs
August 6, 2007 at 2:48 pm |
“You’re so wise. You’re like a miniature Buddha, covered in hair.” – Anchorman
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August 8, 2007 at 3:45 pm |
[...] The Lyons Den Business / Vitality / Spirituality / Relationships « Equity Key – The Best Alternative to a Reverse Mortgage [...]
August 9, 2007 at 1:55 pm |
We just helped another client yesterday. The husband is 84yrs old and the wife is 80. Their home is worth $875,000 and they currently owe $395,000. One of them is going to do Equity Key. They want to do the lump sum. They should get between $105-$130K. This will take care of their payments they still have and then some. So they in essence exchanged only 50% of the future equity. The $875K is 100% theirs or their heirs to keep. Another great scenerio.
September 6, 2007 at 2:12 pm |
Leonard
Hello. Here is the email about the equity key program that we went over. Bill Lyons is in meetings all day so I set up an appointment for tomorrow at 11:30am. Please let me know if that will work for you
EquityKey allows you to convert the future equity in your home into debt-free cash today.
In exchange for the debt-free cash, you will give EquityKey the right to a portion of the future appreciation of your home. EquityKey is NOT a loan and it’s NOT a debt. They only make money if your home appreciates.
EquityKey is a bank and they pay you money to partner with you only on the future appreciation of your home. Think of it like getting an advance on the future sale of your home.
You get paid today, and when you experience any future appreciation, you’ll split that with EquityKey. So, EquityKey will only make their investment back when your home appreciates. No appreciation, nothing to payback. Small appreciation, small payback. This appreciation (if any) is determined when you sell the house or pass away.
All of the equity that you’ve already accumulated, stays with you.
Remember, EquityKey only splits the future appreciation, not your current appreciation, that part belongs to you.
I hope this explains what we went over. We will call you tomorrow at 11:30am and go over everything else that you had questions on in detail. Thank you for your time.
January 31, 2008 at 11:25 am |
I’ve been a memeber of the National Academy of Elder Law Attorneys for many years. This “Equity Key ” program may have some real benefits for many seniors.
How do I research the company behind this offering? Name and location of home office, it’s officers etc?
RJP
January 31, 2008 at 6:36 pm |
Yes I agree Richard. I think a reverse mortgages can be a crappy product for most seniors. you can go to http://www.equitykey.com
You can sign up through us a broker. George runs the equity key for us gsmith at leifinancial dot com
September 30, 2008 at 3:48 pm |
The program offered by EquityKey will server an important niche in the market for the senior community looking for liquidity without debt.
Two other companies REX & Co. and NestWorth offer products for this category expanding “Equity Participation”.
Warm Regards,
David H. Schwartz
Broker